JP reports 17% increase in first quarter net profit attributable to shareholders

May 18, 2021

Jamaica Producers Group Limited (JP), for the three months ended March 31, 2021, booked a 6% increase in revenue to total $5.48 billion compared to the $5.15 billion reported in 2020.

The Food and Drink Division reported a 9% increase in revenue to total $3.34 billion relative to $3.07 billion reported in 2020. The Group stated that, “During the quarter, the Division continued to experience significant challenges to food sales in travel retail, food service and convenience channels. This was offset by increased sales of consumer staples to supermarkets as well as specialty foods through our e-commerce and gifting segments serving the United States. Regrettably, our margins were adversely affected by the change in the sales mix as well as extraordinary measures taken to maintain our service levels across all aspects of our international fresh fruit and vegetable supply chain and food processing facilities. These challenges were compounded by significant price increases in key raw material items.”

Revenue from Logistics and Infrastructure increased by 3% year over year to total $2.15 billion (2020: $2.09 billion). The Group highlighted that this was, “primarily as a result of increased regional transshipment activity at our port terminal, and overall growth in our logistics operations in the UK and the Caribbean.” JP also noted, “We expect the Division to be in a strong position to deliver consistent profitable growth as soon as the conditions associated with the pandemic improve. Accordingly, the major areas of focus for management are cost control and investment in improved efficiency. We are also implementing a range of initiatives to improve digital processes to allow for more convenient tracking and receival of cargo at our logistics facilities. Our goal is to better support our commercial customers with improved inventory management and supply chain control as well as the timely receival of cargo. During peak periods, the improved digital processes will enhance the overall customer experience and support social distancing during shipping, clearing and collecting personal effects and commercial cargo at our logistics facilities in the UK and the Caribbean.”

The Corporate Services division earned $29.04 million relative to $22.65 million in 2020, a 28% increase.

Cost of sales closed the three months ended March 31, 2021 at $3.95 billion, a 10% increase when compared to $3.59 billion reported for the comparable period in 2020. As a result, gross profit decreased to close at $1.53 billion, a 2% reduction from $1.56 billion documented in 2020.

Other income for the three months end March 31, 2021 amounted to $197.51 million relative to other income of $154.70 million for the three months ended March 31, 2020.

JP’s selling, administration, and other operating expenses closed at $964.92 million, this compares to $927.08 million booked a year earlier. JP also recorded an operating profit of $763.37 million for the first quarter ended March 31, 2021 (2020: $788.57 million) representing a 3% decrease. While, the share of loss in joint venture amounted to $16,000 relative to a loss of $4.54 million reported in the previous corresponding period.

Finance cost was reported at $63.84 million for the three months ended March 31, 2021, relative to the $71.60 million reported in 2020. As such, profit before taxation amounted to $699.51 million for the period (2020: $712.44 million).

The Group incurred tax charges of $129.39 million (2020: $152.94 million). Consequently, net profit for the period rose by 2% to close at $570.13 million (2020: $559.49 million). Notably, net profit attributable to shareholders, for the quarter ended March 31, 2021, totalled $256.50 million; a 17% increase from the $220.01 million reported in the prior year’s corresponding period. Total comprehensive income amounted to $516.98 million (2020: $600.69 million).

Earnings per share for the period amounted to $0.23 (2020: $0.20), while the twelve-month trailing earnings per share amounted to $1.96. The number of shares utilized in the computations amounted to 1,122,144,036 units. JP stock last traded on May 17, 2021 at $23.46 with a corresponding P/E of 11.94 times.

JP noted that, “Subsequent to the end of the First Quarter, JP acquired a 50 percent interest in Geest Line Limited (“Geest”). Geest operates a shipping line calling the UK and Europe, several destinations in the English-speaking Caribbean, Colombia and the Dominican Republic. Refrigerated fresh fruit constitutes the major share of the eastbound cargo destined for Europe from the Caribbean, with consumer goods, vehicles and other capital goods representing the major share of the westbound cargo transported to the Caribbean from Europe. The remaining 50 percent share of Geest was acquired by Seatrade Group, a ship-owning and chartering business with whom JP has had a long relationship.”

Balance Sheet Highlights:

As at March 31, 2021, the Group’s asset base totalled $41.44 billion, 8% more than its value of $38.49 billion a year ago. This increase was due largely to increases in ‘Securities purchased under resale agreements’ which closed at $7.82 billion (2020: $5.48 billion).

The Group ended the period with equity attributable to shareholders in the amount of $16.32 billion relative to $14.09 billion in 2020. The company now has a book value per share of $14.54 versus $12.56 in 2020.

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