A sharp surge in insurance income reshaped Caribbean Producers Jamaica’s (CPJ) December quarter, cushioning the financial impact of Hurricane Melissa, which had disrupted operations and demand across its core hospitality market.

The company recorded US$14.18 million in other operating income in the December 2025 quarter, a dramatic jump from just US$112,618 a year earlier — a swing largely attributable to insurance recoveries tied to hurricane-related losses. Looking back at the September quarter, before insurance claims were recognised, other operating income was negligible, reinforcing that the year-end surge reflected insurance proceeds rather than core operations.

Operating profit rose to US$9.27 million in the December quarter, up from US$3.66 million a year earlier, bringing full-year operating profit to US$16.11 million.

Without the insurance recovery, CPJ’s December quarter would likely have been weaker and may even have slipped into a loss, reflecting the financial impact of Hurricane Melissa.

In response to queries from the Jamaica Observer, Pandohie confirmed that the company suffered significant inventory losses during Hurricane Melissa, but insurance coverage allowed CPJ to fully replace the damaged stock.

“There was an excess of approximately US$2 million of the insurance claims receivable in respect of inventory versus the replacement costs of inventory, which was recognised in the profit and loss account,” he explained, noting that the bulk of the insurance proceeds were used to restore inventory rather than boost earnings.

He added that CPJ has submitted additional insurance claims relating to damaged machinery, equipment and leasehold improvements, but no material amounts have yet been recognised while the company continues to assess replacement costs.

The insurance support came at a critical time for the business. Hurricane Melissa struck just ahead of the winter tourism season, a period that typically delivers the strongest demand for CPJ’s hotel-linked distribution business. The disruption was visible in CPJ’s numbers, with revenue for the December quarter falling to US$22.4 million from US$46.1 million a year earlier, reflecting weaker hospitality demand following Hurricane Melissa. Accounts receivable increased as some hospitality customers struggled to resume operations, while inventories declined partly due to hurricane-related losses and adjustments to near-term demand. The company also noted that roughly 40 to 45 per cent of hotel rooms in Jamaica were temporarily closed for repairs following the storm.

Even so, CPJ sought to stabilise operations by expanding retail distribution to offset weaker hospitality demand. For the year ended December 2025, the company reported revenue of US$152.06 million and net profit attributable to shareholders of US$8.24 million, with management pointing to improved scale, regional expansion and tighter cost control despite the disruption.

“Our integrated supply chain, diversified product portfolio, and strengthened regional partnerships position CPJ to capitalise on market recovery and continue expanding,” Pandohie said.

Management expects tourism activity to normalise as hotel properties reopen, which should gradually restore demand across its core hospitality channel. In the interim, CPJ says it will prioritise cost control, working capital discipline, retail expansion, and gradual deleveraging to stabilise earnings as the recovery unfolds.

— Karena Bennett