A highly competitive global remittance market and the continuation of macro-economic challenges are being cited among the top reasons for GraceKennedy Money Services’ (GKMS) underperformance after its results returned flat at the end of the first-quarter period in March.

The global and local macro-economic environment continue to be weighed down by inflationary pressures and rising interest rates that saw revenues under the segment clutched at $2.1 billion coupled with net profit of $710.1 million. During the corresponding period last year, revenues for the segment similarly amounted to $2.2 billion in revenues and $778 million.

“GKMS is addressing these challenging conditions through improvements in operational efficiency and service delivery and the expansion of its digital business,” the company’s director said in notes affixed to its recently released results.

The local remittance market recorded a 2 per cent dip in 2023 with inflows at US$3.1 billion. The Bank of Jamaica (BOJ), in a bulletin, said the decline was the largest seen in a decade.

The dip, which equates to US$67 million or approximately $10 billion, was also the second-consecutive year of decline in remittance inflows. In 2022, net remittances dipped 1.7 per cent from the record $3.26 billion that was sent to the island in 2021 when inflows rose more than 21 per cent.

Inflows from the US, which ranks as the largest remittance source market accounted for 67.5 per cent of the total—down from 70 per cent in the year prior. Remittances from the UK which remained unchanged at 11 per cent of the total was followed by increased outturns from markets such as Canada which grew to almost 10 per cent of all remittances sent to Jamaica, up from 7.9 per cent in 2022 and the Cayman Islands to 7 per cent, up from 6.9 per cent a year earlier.

Still, at least for the first two months of this year, inflows are showing some revival. Up to February 2024, remittance inflows according to BOJ data stood at $233 million— an increase of 1.1 per cent or US$2.6 million more than was received between January and February 2023.

As the food and financial conglomerate continues to build-out this business, it’s planning to onboard some 50 new Western Union outlets, including in 19 Courts stores through a partnership signed recently with Unicomer Jamaica Limited.

GKMS which has been the local agent for Western Union for more than three decades now operates an islandwide network of more than 200 stores.

The conglomerate in which it operates however returned an eight per cent increase in outturns for group sales pushing revenues for the three month period to the end of March to $42.3 billion with net profit of $2.3 billion. The heavily weighted food division continued to lead the bulk of revenues accounting for $34.1 billion in revenues and $2.3 billion in profits. This was followed by improved revenue performances under its insurance segment which returned $3.6 billion and banking and investments, $2.6 billion.

“Our team, customers, business partners, shareholders and the communities we serve around the world all play a vital role in our success. Thanks to your loyalty and support GK is off to a positive start in 2024,” the directors added.

The company, in keeping with its commitment to deliver value for shareholders following this latest performance, has also declared its second dividend payment for this year. The dividends declared at $0.55 per share will see a total of $545 million being made payable to shareholders on June 14.