JAMAICA Broilers Group Limited’s (JBG) shares tumbled over four per cent on Tuesday, wiping out $1.51 billion (US$9.4 million) in market value as investors reacted to the latest update on its USA operations which will have a material impact on the group’s financials.

JBG had informed the market in late March, through its third-quarter (November to January) report, that corporate management had identified a number of issues relating to expense management and operational controls at its USA operations. Those issues resulted in the company’s Q3 report being delayed by over two weeks before it was published on March 27.

That report revealed that the group reported a consolidated net loss of $1.15 billion for Q3 compared to a consolidated net profit of $1.30 billion in the prior period. That drop in profitability was largely influenced by the USA operations which had a net loss of US$13 million ($2.05 billion). The USA’s net loss was influenced by a variety of factors such as invoices not being accounted for correctly in prior reporting periods, significant weather events in the southern belt of the USA, and a drop in chicken prices from US$1.80/lb to as low as US$1.15/lb.

External advisors were brought in to review the operational controls and the possible implications these would have on the financial performance of the USA operations. All JBG subsidiaries located outside of Jamaica are externally audited by non-PricewaterhouseCoopers (PwC) firms.

Based on what Jamaica Broilers’ corporate management team from Jamaica discovered with the USA operations, the entire USA management team was separated in January. This included Stephen Levy, president of the USA operations, and Syd A Mogg, vice-president of the US operations (Wincorp International Inc), who both resigned from JBG’s board of directors on May 3. Levy resigned from the company after spending 22 years at the business while Mogg retired after more than 33 years with the business. JBG Group President & Chief Executive Officer (CEO) Christopher Levy is currently overseeing the USA operations. Stephen Levy is the brother of Christopher and son of JBG Chairman Robert E Levy.

“Having received preliminary and not-yet-finalised reports from its external advisors, and having assessed the financial performance of the US operations, the company wishes to disclose the following material information, in keeping with the JSE Rules, Appendix 8, which it believes could have significant implications for the financial statements of the company, namely unsubstantiated accounting valuation methodologies affecting several financial statement line items including inventories and biological assets,” stated the JBG disclosure posted on Monday.

Biological assets refer to animals owned by a company and used to generate revenue for the business. According to the group’s 2024 audited financials, Jamaica Broilers’ biological assets include beef cattle, breeder flocks held for the production of hatching eggs, layer pullets being grown for sale to table egg farmers, layer pullets held for the production of table eggs, and broiler flocks at various stages of growth. These biological assets are measured using different methodologies which are affected by the stage of growth for these animals.

JBG’s inventories include grain and feed ingredients, inventories for resale, goods in transit and general supplies. Inventories and biological assets made up 58 per cent of the group’s asset base and 22 per cent of the company’s asset base as per the 2024 audited financials. Thus, any significant change to those two line items can have a material impact on the group’s consolidated numbers.

“The issues identified appear to constitute material prior period errors and will, once determined and finalised, be fully corrected following the conclusion of the annual financial audit for the company. As a result of the likely restatement of inventories and biological assets we anticipate a material negative impact on the historical profitability of our US operations and the group’s consolidated retained earnings and capital,” the JBG disclosure went on to explain about restatements.

JBG’s 2024 audited financials revealed that the USA operations contributed $33.45 billion or 36 per cent of group revenue and had total assets of $54.12 billion or more than half of the group’s consolidated assets.

JBG President and CEO Christopher Levy indicated at a private briefing in March that an internal audit department would be established at the USA operations and would streamline the USA systems and processes with the Dynamic 365 platform. He indicated that the 2026 financial year would be a consolidation year for the US operations, which they are still optimistic about scaling to higher heights. He highlighted that the Jamaican team was able to improve the chicken processing plant’s yield from 56 per cent to 62 per cent in two weeks after they took control of the USA operations.

The JBG disclosure also highlighted that the company has taken steps with its legal and financial advisors to address the issues at the USA operations and focus on accurate reporting of the profitability of the business. JBG is set to tap the capital markets shortly to support its operations. Christopher Levy recently appeared on a Mayberry Investments segment.

“The company has met with the JSE, and are engaging with the Financial Services Commission (FSC), and will continue to keep the JSE, FSC, its shareholders, stakeholders and the investing public apprised of any information which may have a material financial impact on the company or its operations,” JBG noted.

JBG has a $1.5-billion unsecured bond listed on the JSE Private Market maturing April 2028, and a $2-billion unsecured bond maturing January 2027. The restatement of the group’s financials could affect the covenants related to different debt instruments.

JBG’s share price closed Tuesday at $27.24, which left it down 24 per cent in 2025 with a market capitalisation of $32.67 billion. Jamaica Broilers did not consider a semi-annual dividend after the release of the third-quarter report. JBG’s 2025 financial year ended on May 3 based on its non-conventional financial year. The audited financials are scheduled to be released by July 2.