Jamaica Producers Group (JP) posted higher net profit for its second quarter — from $135.3 million in the comparative period last year to $767.5 million — but without the over $700 million it earned from the sale of long-term equity holdings to support its planned investment and business development programme, pre-tax profit would have been down .

The company’s core businesses — Tropical and Europe divisions — reported a decline in profit before tax from $90.8 million for the 13 weeks ended July 3, 2010 to $85.2 million in the review period, primarily due adverse weather dragging down banana production.

“This has resulted in higher unit costs in our banana and local snack food business and has suppressed our sales volumes,” said JP chairman Charles Johnston in a statement accompanying the financial statements. “These challenges were only partially offset by the introduction of bammies and pineapples and the importation of snacks from our joint venture factory in the Dominican Republic.”

Tropical Storm Nicole and unusually cold weather late last year dramatically reduced production at JP’s banana farms, but the company was able to break even in its first quarter as a result of risk management initiatives, which involved growing bammies and pineapples and the supplementing of local production of banana chips with additional volumes imported from our joint venture factory in the Dominican Republic. “This move was necessary to safeguard our market position, and achieved the desired result,” said the chairman in the first quarter.

Nevertheless, the group’s Tropical division posted a $27.7 million loss during the quarter under review compared to a $18.6 million profit the prior year.

Now, Johnston says the “recovery of our banana production is now nearing completion, but with the summer traditionally our quietest sales quarter, we do not expect profitability to fully recover until later this year”.

He added: “Internally our human and financial resources are focused on continuing our strong history of new product development and are refining a number of innovations for launch later this year. With rapidly growing revenues from our JP Tropical Pineapple, our farming operation is busy expanding our crops to meet the demand.”

JP’s Europe division — which comprises businesses that are centred in Europe and include production and marketing of natural food and drink, and a logistics business — saw its profit before tax improve from $72.2 million during the comparative 13-week period a year ago to $112.9 million in the quarter under review.

“This year, JP Europe’s juice business has faced an economic environment characterised by high raw-material commodity prices and prolonged macroeconomic uncertainty,” added Johnston’s report. ” Our immediate measures to maintain profitability have included a review of customer contracts to allow for sharing of the raw material price risk and further investment in plant, equipment and technology to improve our operating efficiency.

“Our active medium-term measures centre around product innovation. We are particularly focused on products that will allow us to effectively target new markets for our juices and fruit-based products. This is exemplified by the launch in July of a range of fresh fruit purees in pouches. We are satisfied that these measures will support the ongoing development and profitability of this business.”