HIGHER costs of sales linked to a depreciating dollar in Haiti and Jamaica have impacted the six-month results for Jamaica Broilers Limited (JBL).

For the six months ended October 31, net profit fell by 43 per cent from the $720.31 million reported last year to $405.77 million for 2015.

Group revenues for the six months amounted to $18.1 billion compared to the $16.6 billion in the corresponding period last year.

However, cost of sales rose to $13.5 billion compared to $13.08 billion last year. Overall, earnings per stock unit for the six-month period fell to 33.81 cents compared to 61.17 cents for the similar period in 2014. While subsidiary Haiti Broilers SA has increased production and sale of table eggs to 14 per cent of the market – compared to 12 per cent at the end of the second quarter last year – volume growth has been neutralised by significant increases in operating costs due to the continued depreciation of the Haitian gourde against the US dollar as mentioned in the company reports in its results for the six-month period ending October 31.

Similarly in Jamaica, distribution, selling and administrative costs, were affected by inflation increases and the effect of the depreciation of the Jamaican dollar against the US dollar.

The best-performing segment for the period are US operations where, in July 2013, Jamaica Broilers Group Limited (JBGL) purchased a leading provider of broiler-hatching eggs. Segment results amounted to $538 million for the six months to October 1.

“Our presence in the markets remains strong with a broad customer base and we are seeing the benefits of the US dollar hard currency earnings,” Robert Levy, chairman and Christopher Levy, president and CEO said in the note to shareholders for the period’s results.

Comparatively, the bid by Jamaica Broilers and its Haitian business partner to become a cog in the well-oiled wheel of Haitian agriculture is not turning out quite as planned.

The Haitian subsidiary is a joint-venture company between JBGL and business partners, Tropic SA which became operational in 2012 .

On the company’s website, JBL describes the venture as aimed at developing the poultry and farming industry through the supply of baby broiler chicks, started (layer) pullets, animal feeds, medication and supplies to Haitian farmers so they can launch profitable farming ventures.

To accomplish this, Haiti Broilers established a feed mill and hatchery and hired a technical team to operate island wide and help farmers utilise modern scientific techniques to obtain profitable production.

For this operation, as reported in the last annual report, 2014-2015 was a break-even year. A major contributor to this result was table eggs which accounted for 45 per cent of sales.

But, with the company yet to make a profit, Group President and CEO Christopher Levy suggests that the restructuring of an entire industry and more formal ways of doing business may need to come to pass before the Haitian subsidiary begins to thrive as desired.

“The environment in Haiti continues to be challenging, but we have learned to navigate the waters. The economy in Haiti is becoming more structured and more focused on local production and growth. Much has to be done but the authorities have demonstrated a willingness to bring more formality to the economy,” he told the Jamaica Observer.

He noted that while Haiti is a small contributor to the revenue of JBGL, the subsidiary has grown 25 per cent this financial year in production.

In relation to growth in the wider Caribbean, Levy told the Observer, “JBGL is not considering any further expansion in other islands at this time. We believe it important to continue to grow Haiti Broilers over the next few years so it can be a significant contributor to the business of JBGL.”