A fall-off in earnings for its remittance business during the third quarter ended September has propelled the GraceKennedy Group through its GK Money Services (GKMS) division to review strategies as it moves to return growth to the lucrative portfolio.

Group Chief Executive Officer Don Wehby, speaking at a quarterly press briefing on Monday, said that with over 40 per cent of the company’s profit derived from outside local borders, the presence of continued headwinds including rising global inflation and increasing interest rates in local and foreign markets had affected its remittance performance. He pointed to depreciations of 14.5 per cent for the pound sterling and 5.8 per cent for the Canadian dollar against the US dollar during the reporting period.

This saw operating revenues from its money services segment declining to $6.6 billion and profit to $2.4 billion when compared to $7.2 billion and $3.1 billion it respectively delivered in 2021. The fall-off, GK said in an interim report to shareholders, was primarily attributed to lower transaction volumes and reduced foreign exchange gains.

The Bank of Jamaica (BOJ), in a recent report documenting the performance of remittances, also said that for the January to September 2022 period, inflows to Jamaica amounted to US$2.6 billion, an almost 2 per cent drop when compared to the previous year’s period.

“The disposable income of our Caribbean Diaspora has been significantly affected as their ability to send money back home to loved ones becomes challenged,” Wehby said at the briefing, pointing to rising inflation rates of 8.2 per cent in the US, 10.2 per cent in the UK and 6.9 per cent in Canada also taking place across the period.

“We need remittances to be up not down… In all my career and being at GraceKennedy for the last 25 years, I’ve never seen remittances down in our country, never! We now need to see what we can do that is within our control to grow the remittance market,” he said.

Among a slew of measures to be undertaken by the GK Money Services team, the group CEO said were those heavily focused on the ramping up of marketing activities in the Diaspora, a review of pricing strategies and its chain of agent networks to ensure efficiency as well as a greater focus on compliance and customer centricity.

“I will be having a meeting with the top executives of Western Union on Wednesday to discuss further how we can stimulate remittances to Jamaica and the Eastern Caribbean. Our plan is to improve on marketing in the Diaspora — we have two consultants in Florida and New York, and we are going to be visiting every nook and cranny as we beat the pavement to see how best we can stimulate growth,” Wehby said, noting that since the start in September there was already a noticeable close in the gap that existed.

GKMS, a part of the GraceKennedy Remittance Limited (GKRS) Group of companies, is a wholly-owned subsidiary of the GK Group and serves as the exclusive agent for Western Union in several countries across the Caribbean. Along with their FX Trader cambios and Bill Express payment outlets, the GKMS network spans over 300 locations locally.

“I believe we are going to finish the year very strong and 2023 is going to be a much better year for remittances not only for GraceKennedy, but for Jamaica and all the other countries in the Eastern Caribbean,” Wehby added.

The food and financial services conglomerate also bullish on its future outlook after reporting reduced profits of $5.6 billion— 9.4 per cent below the prior year period, said that plans were now in train to fast track some deliverables under its vision 2023 objective through which it is positioning to become a US$2.1-billion company in revenues with plans to along the way, double exports to 50 per cent by 2025.

Notwithstanding the headwinds and remaining cautiously optimistic about the future of its business, Wehby further said that the group remains committed to achieving its strategic objectives with expectations to end the year with a positive fourth quarter.

“Overall we are focusing keenly on cost management, we’re continuing to look at our growth from revenues while ensuring that we can meet customers’ needs and return to a stronger profit position going forward,” stated Andrew Messado, group chief financial officer, in his report at the virtually held briefing.