Pan Jamaica targets end-2027 exit from $5b-$6b non-core portfolio
PAN Jamaica Group expects to complete the disposal of a $5-billion to $6-billion portfolio of non-core assets by the end of 2027 as it redirects capital towards businesses offering stronger growth prospects, following a first half in which pretax profit fell by half despite higher revenue.
The portfolio includes listed securities, international investment partnerships and venture funds, as well as non-controlling interests in businesses outside the four operating segments Pan Jamaica has identified for long-term growth, Vice-Chairman and Chief Executive Officer Jeffrey Hall told the Jamaica Observer Tuesday.
Hall said the value of the portfolio fluctuates with market prices but currently falls within the $5-billion to $6-billion range. Pan Jamaica has not identified the individual securities, funds or business interests it plans to sell.
“There is no pressure to complete the programme,” Hall said.
He said the timing of individual disposals would depend on market conditions, with the pace likely to accelerate as the Jamaican market recovers from Hurricane Melissa and geopolitical uncertainty in international markets eases.
Pan Jamaica expects to complete the programme by the end of 2027.
The group had previously disclosed approximately $5.5 billion in non-core holdings for possible sale but had not provided a completion timetable or detailed the types of assets involved.
Hall said Pan Jamaica was seeing a range of investment opportunities within its four core areas and intends to use proceeds from disposals to support the repositioning of the group for what he described as “aggressive growth”.
The portfolio shift comes after earnings weakened across most of the conglomerate during the first half.
Revenue increased six per cent to $22.79 billion, but pretax profit fell 50 per cent to $2.55 billion. Profit attributable to Pan Jamaica shareholders declined 60 per cent to $1.47 billion.
Profit fell across three of the group’s four operating divisions, while second-quarter revenue was virtually unchanged from a year earlier.
Pan Jamaica was affected by lower earnings from associated companies, weaker investment returns and costs that grew faster than revenue.
Its share of profit from associated companies and joint ventures fell by $1.58 billion to $1.51 billion, accounting for nearly two-thirds of the decline in pretax profit.
Net investment income also moved from a $617-million gain in the corresponding period last year to a $37-million loss.
Operating costs added further pressure. The cost of generating revenue increased nearly 12 per cent during the first half, almost twice the rate of sales growth, contributing to a five-per-cent decline in gross profit to $6.41 billion.
Pan Jamaica retained approximately $28.10 in gross profit from every $100 of revenue, down from $31.50 a year earlier.
Financial Services recorded the largest divisional decline.
The segment, whose principal holding is Pan Jamaica’s 30.2 per cent interest in Sagicor Group Jamaica, generated profit of $1.45 billion, down 45 per cent.
Pan Jamaica said the comparison was affected by a one-off gain from the sale of securities in 2025 and market-related gains in Sagicor’s insurance business that were not repeated this year. Sagicor’s general insurance operation also made additional provisions connected to Hurricane Melissa.
Global Services revenue rose five per cent to $7.59 billion, but profit fell 28 per cent to $1.80 billion as higher costs and depreciation weighed on Kingston Wharves, while severe North Atlantic weather and higher fuel costs affected Geest Line.
Pan Jamaica said Geest’s schedules have returned to normal and the shipping company is securing price increases to offset higher fuel costs.
Specialty Foods increased revenue nine per cent to $12.79 billion, but profit fell 47 per cent to $222 million, mainly because of hurricane damage at JP Farms.
Pan Jamaica said earnings within the division increased when JP Farms was excluded. Rehabilitation of the banana operation has been completed ahead of schedule and the farm is expected to return to full production during the third quarter.
The group’s European juice businesses also recorded higher volumes and improved margins, with selected acquisitions being considered to expand that operation.
Property and Infrastructure was the only operating division to avoid a decline. Revenue remained at approximately $2.4 billion, while profit edged up to $721 million. Commercial properties performed satisfactorily, while the hotel businesses maintained steady occupancy and room rates.
Hall said the asset sales are intended to reallocate capital towards growth opportunities rather than meet an immediate need for cash.
The group ended June with $17.52 billion in cash and short-term investments and a debt-to-equity ratio of approximately 20 per cent. Loans declined by $1.23 billion since December to $23.11 billion.
Cash generated from operations, however, fell 39 per cent to $1.57 billion, while the group’s cash and short-term investment balance was $1.70 billion below the level at the end of December.
Since the reporting period ended, Pan Jamaica has acquired the property occupied by Discount Pharmacy, allowing it to connect its Manor Park retail complex with its Olivier Road offices. It has also acquired Jamaica Trading Services and UK-based West Indies Freight to extend its logistics network.
The group has not disclosed the purchase prices for those acquisitions.