Jamaica Broilers Group (JBG) President and Chief Executive Officer (CEO) Chris Levy is bracing for a difficult third quarter, forecasting a simultaneous squeeze from a collapse in United States (US) meat prices and the disruptive aftermath of Hurricane Melissa on its core Jamaican market.

Levy issued the stark warning even as he reported a dramatic operational turnaround that saw production costs in the US meat business slashed by a third, underscoring that external shocks now pose the greatest threat to recovery.

The Q3 warning stands in stark contrast to the company’s recent performance. JBG posted a strong $1.6 billion profit in its first quarter, a result Levy attributed to the successful initial phase of its operational turnaround. When asked directly if those results signalled a final cauterisation of the fraud-related issues, Levy confirmed the investigation was complete. However, he indicated that the positive momentum from Q1 is unlikely to be sustained through the subsequent quarters, creating a “bumpier” path to full-year recovery.

Based on the company’s financial calendar, Jamaica Broilers Group’s second quarter (Q2) for the 2024/2025 financial year covered the period ending November 2, 2024. Following the conclusion of the quarter, the company’s Q2 financial results, which will include the significant $40 billion asset revaluation, are normally published within six weeks—likely by mid-December 2024.

The subsequent third quarter (Q3) covers the period ending on or around January 31, 2025. Following the same reporting pattern, these results—which CEO Chris Levy has warned will be challenging—are expected to be released by mid-March 2025.

“I think quarter three is going to be a tough one,” Levy stated definitively during the Mayberry Investor Forum on Friday. The challenge is twofold: “meat prices in the US have gotten very low” and the company is projecting a five to six per cent dip in Jamaican revenues due to the hurricane’s impact.

The warning highlights the company’s vulnerability to external crises, even as it successfully contains the internal financial fraud that led to $46 billion in balance sheet adjustments.

In Jamaica, where Levy described the operations as the group’s “great and steady cash cow”, Hurricane Melissa has delivered a blow. While the company’s main revenue driver, Best Dressed Chicken, is expected to see a minimal direct impact from a downturn in tourism, the broader agricultural sector has been hit hard.

“I think the impact on Best Dressed Chicken in Jamaica is going to be relatively insignificant. I think we’re still looking at a fairly robust [tourism] season,” Levy said. However, he pinpointed the real damage to the company’s Hi-Pro division, which supplies baby chicks and feed. “Where I think we’re going to be challenged is on the Hi-Pro side with layer feed and baby chicks, those sort of things.”

This domestic setback is compounded by a severe downturn in the US market. Despite a herculean effort to cut the cost of production in the US meat business from US$2.00 per pound to US$1.35, the falling market price means those gains may not reach the bottom line.

“The operational changes that we’ve made here are tremendous,” Levy said, speaking from the United States, “But I can’t follow the meat price the revenue side down.”

Ian Parsard, senior vice president with responsibility for finance and corporate planning, elaborated on the company’s broader recovery strategy, which includes a major asset revaluation. “We are looking at a potential uplift of approximately $40 billion to be reflected by the time we get to our Q2 release,” Parsard stated, a move that will significantly rebuild shareholder equity.

Faced with this “perfect storm”, Levy confirmed that strategic reviews are underway, particularly for the struggling US meat business. “We might be taking some difficult decisions on the meat business. We’ll know over the next quarter or so,” he told investors, signalling that a potential exit remains on the table.

The confluence of events confirms that while JBG has successfully cleansed its financial house, declaring the “closet is clean”, its path to full recovery must now navigate turbulent economic and environmental weather.

(Note: These timelines are estimates based on standard corporate reporting practices. The exact publication dates will be confirmed by the company.)