JP reports 23% growth in year end profits attributable to shareholders

Date: March 04, 2019

Jamaica Producers Group Limited (JP), for the year ended December 31, 2018, booked a 21% increase in revenue to total $19.61 billion compared to the $16.16 billion reported in 2017. The Group posted a fourth quarter revenue of $5.36 billion, a 12% increase (2017: $4.77 billion).

The Food and Drink Division reported a 29% in revenue to total $11.34 billion relative to $8.81 billion reported in 2017. The Group stated that, “the F&D Division benefitted from a particularly strong performance from our European juice business – the largest business in the division. Our fresh juice business entered new markets with new products and new customers and achieved record sales. We now have a strong book of business supplying high quality juice to leading retailers in Holland, Belgium, Germany, Scandinavia, the UK and the Czech Republic. During the year we installed new fresh juice extraction lines and acquired real estate to support our ongoing business expansion.”

Jamaica Producers further highlighted that, “our Caribbean Food businesses (JP Tropical Foods, JP Farms and Tortuga collectively) also experienced improved overall results. JP Tropical Foods benefitted from strong export growth and new product development initiatives. We were particularly pleased with the growth in our fresh banana sales. We expanded production on our farms, strengthened our quality systems and generated sales growth of over 40% in the year.

Logistics and Infrastructure increased 12% year over year to total $8.26 billion (2017: $7.35 billion). JP indicated that, “the Logistics and Infrastructure division continues to benefit from significant capital investment and business development initiatives to advance Kingston Wharves as a leading regional multipurpose and multi-user terminal and a market-leading logistics service provider as well as increased economic activity and trade flows in Jamaica and across the Caribbean for the range of cargo types served by our business.”

The Corporate Services division earned $5.31 million relative to $4.76 million in 2017,  an 11% increase.

The cost of sales for the year-end increased by 24% to total $13.62 billion compared to $11.01 billion reported for the comparable period in 2017. As a result, gross profit increased to total $5.99 billion, a 16% growth on the $5.14 billion documented in 2017. Gross profit for the quarter amounted to $1.71 billion compared to $1.53 billion booked for the same quarter of 2017. Other income increased to $142.48 million, a 92% growth relative to the prior corresponding period.

JP’s marketing, selling and distribution expenses rose 18% to close at $3.45 billion, this compares to $2.93 billion booked a year earlier. JP also recorded a share of profit in joint venture and associated company of $120.31 million, relative to a profit of $3.78 million in the previous year.

Finance cost was reported at $366.82 million for the period relative to the $308.81 million reported in 2017. This resulted in a profit before taxation of $2.44 billion for the period (2017: $1.98 billion). Profit before tax for the quarter totalled $585.10 million versus $629.76 million reported for the same quarter of 2017.

The Group incurred tax charges of $450.19 million (2017: $356.66 million). Consequently, net profit for the year-end rose by 22% to $1.99 billion (2017: $1.62 billion). Notably,  net profit attributable to stockholders totalled $815.62 million; this compares to $661.88 million, a 23% increase. Net profit attributable to stockholders for the quarter climbed slightly by 1% to total $237.47 million (2017: $235.43 million).

Earnings per share for the period amounted to $0.727 (2017: $0.590). EPS for the quarter amounted to $0.212 (2017: $0.210). The number of shares utilized in the computations amounted to 1,122,144,036 units. JP stock last traded on March 01, 2019 at $23.00.

The Group mentioned that, “Jamaica Producers Group and its subsidiaries will continue a programme of investment that is designed to improve our products and services while enhancing operating efficiency. We are of course mindful of the heightened range of general risks to global trade. We are also attentive to the more specific risks and uncertainties that will affect trade flows with the Caribbean and importantly, may impact the competitiveness of the port of Kingston as a leading transhipment and logistics centre for the region. We are confident that these challenges can be overcome with our proactive business leadership, supported by practical public policies. We are also aware of potential threats to consumer demand in our core markets. We believe that we benefit from the fact that our products are recognised for quality and innovation and have strong positions in our core markets across Europe as well as in the Caribbean, the USA and regional travel retail.”

Balance Sheet Highlights:

As at December 31, 2018, the Group’s asset base totalled $35.06 billion, 7% more than its value of $32.67 billion a year ago. This increase in total assets was due largely to increases in ‘Employee benefit assets’ and ‘Securities purchased under resale agreements’ which closed at $1.99 billion (2017: $1.17 billion) and $4.47 billion (2017: $3.81 billion), respectively.

The Group ended the period with equity attributable to shareholders in the amount of $12.11 billion relative to $11.26 billion in 2017. The company now has a book value per share of $10.79 versus $10.04 in 2017.

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