Montego Bay Ice Company (Mobay Ice) should complete the process of de-listing from the Jamaica Stock Exchange (JSE) within the next six to nine months, according to director, Mark Hart.

Hart told the Business Observer on Monday that the company, which has been plagued by losses over the years following a shift in the local market for manufactured ice, is taking its time going through the process of removing itself as a publicly traded company.

“We are still pursuing that (de-listing) we are just going through the due diligence on that with the Jamaica Stock Exchange,” said Hart. “Its taking a little longer than we thought.”

Hart said the de-listing would result in a company that has less onerous operations costs. He said given that there is less cost in running a private company versus a public company, the delisting makes sense since a reduction in the costs associated with running the business is a primary focus of the management of the ice company.

Mobay Ice recorded a loss of $5.1 million for the year ended December 31, 2010compared to a $663,595 net profit reported at the year ended 2009.

Hart said the losses are mainly on paper and due primarily to the $3.6 million fall off in finance income. This was caused by a five percent revaluation of the Jamaican dollar versus the US currency during the year and resulted in the absence of a repeat of a $3.4 million gain on foreign exchange recorded in 2009.

However, Hart said losses in the Group continued as the market for the ice segment, the largest of the three reportable segments which also include the rental of properties and cold storage facilities and the processing and sale of spring water, continues to contract in Jamaica.

According to Hart, the market for block ice, which the company has been manufacturing, shifted dramatically with improved access to refrigeration, road developments that transferred informal businesses from around the area and generally more developments in commercial businesses that reduced the need for manufactured block ice.

“Now it’s the highway so most of that business has dried up. The more formal people operate restaurants and spas so that would definitely cause a decline. These people have invested in ice machines in the hotels,” he said.

Hart said his business model has therefore shifted from manufacturing ice, to purchasing it from an ice factory in May Pen, after which it is chopped and bagged.

“We have a market for cracked ice,” he said.

That market has returned the most revenue, amounting to $15.7 million, of the three segments in 2010 even though this was $1.7 million below 2009 levels. However, losses in the segment increased nine per cent over prior year to $10.1 million.

Revenues from the rentals segment increased to $14.8 million, up marginally over the $14.4 million recorded in 2009 but the net result declined to $3.6 million from $9.6 million in 2009 following a reduction in interest income.

However, the spring water segment, in which Mobay Ice bottles and distributes purified water under the Ice and Sky Juice water brands has on the other hand reported increases in both revenues and profit after tax year on year.

Gross revenues increased by $1.1 million for 2010, 55 per cent over the $2 million reported in 2009, while profit for the segment improved 395 per cent or $1.14 million above the $289,687 reported in prior year.

Hart said there is a possibility that bottled water might become the major revenue earner for the Group in coming years as the consolidation of the Ice segment continues and the company begins to invest in the marketing and promotion of the bottled water brands.

“It’s a matter of developing a strategy to market and reinvest in the water market,” said Hart who noted that because there is so much competition in the bottled water market locally the company would have to be prepared to spend significantly on marketing the brands. He said at the moment, sale of the products are concentrated in the Montego Bay area.

However, Hart said the focus right now is on winding down operations at Mobay Ice. “Its all about consolidating and constantly looking at things we can do to keep the company open. We definitely have a couple of things that we are looking at now. We will continue to keep our expenses under tight control. We don’t foresee any worsening of the losses,” he added.

Subsidiaries in the Mobay Ice Group include Montego Cold Storage Limited, which is engaged in cold storage and property rental, and Deans Valley Ice Company Limited, which was dormant as of December 31, 2009.