JP reports 36% rise in nine months profit attributable to shareholders

November 12, 2018

For the nine months ended September 30, 2018,  Jamaica Producers Group Limited (JP) experienced a 25% increase in revenue to total $14.25 billion compared to the $11.38 billion reported in 2017. The Company posted third quarter revenue of $4.96 billion, a 25% increase (2017: $3.98 billion).

The Food & Drink Division contributed a 34% increase in revenue to total $8.31 billion relative to the $6.21 billion reported in 2017. The Company highlighted that, “The F&D Division continues to benefit from strong year-on year improvements in our European juice business as well as in our tropical snack food business. In both cases, the improved results reflect our ongoing investment in innovation and new product development. In Europe, we commenced a significant capital investment programme that will include the installation of a major new juice extraction line as well as state-of-the-art processing facility for cold pressed juice. The new production lines are expected to significantly expand our plant capacity and improve quality and efficiency. We are optimistic about the prospects for this business and believe that these justify the ongoing investment programme.”

The company further indicated that, “In our tropical snacks business, we continued to build-out our new line of frozen “ready-to-cook” tropical foods for the US market. We expect the benefits of our Division-wide product innovation programme to continue with the launch of “Mexican Vanilla Rum Cake” under the Tortuga brand in 2018. The Mexican Vanilla Rum Cake will be marketed in the Caribbean coast of Mexico and in other major travel retail markets.”

Logistics and Infrastructure increased 15% year over year to total $5.94 billion (2017: $5.18 billion). JP stated that, “The L&I Division continues to benefit from business development initiatives to advance Kingston Wharves as a leading regional multipurpose and multi-user terminal and a market-leading logistics service provider. The company experienced earnings growth in its logistics and terminal operations businesses.”

The Corporate Services division earned $3.15 million relative to nil in 2017. The Company mentioned that, “The year-to-date results for the Corporate Services Division reflect increased costs of investment projects which were more than offset by the trading growth in other divisions. The Corporate Services Division also benefited from some one-off incomes in the prior year that were not repeated in 2018.”

The Cost of Sales for the nine months increased by 28% to total $9.97 billion compared to $7.77 billion reported for the comparable period in 2017. As a result, Gross Profits increased to total $4.28 billion, a 18% growth on the $3.61 billion documented in 2017. Gross profit for the third quarter amounted to $1.42 billion compared to $1.29 billion booked for the same quarter of 2017. Other income increased to $271.31 million, a 106% improvement relative to the prior corresponding period.

JP’s marketing, selling and distribution expenses rose 12% to close at $2.45 billion, this compares to $2.18 billion booked a year earlier. As such profit from operations amounted to $2.10 billion relative to $1.56 billion booked for the corresponding period in 2017. Profit from operation for the quarter amounted to $726.64 million compared to $583.76 million reported for the corresponding quarter of 2017. JP also recorded a share of point in joint venture and associated company of $31.93 million relative to $155,000 in the previous year.

Finance cost was reported at $277.46 million for the period relative to the $214.02 million reported in 2017. This resulted in a profit before taxation of $1.85 billion for the period (2017: $1.35 billion). Profit before tax for the third quarter totalled $636.07 million versus $514.17 million reported for the same quarter of 2017.

The Company incurred tax charges of $451.16 million (2017: $245.20 million). Consequently, Net Profit for the period rose 27% to $1.40 billion (2017: $1.11 billion). net profit for the quarter amounted to $502.69 million versus $435.44 million. Notably, Net profit attributable to stockholders totalled $578.15 million; this compares to $426.45 million, a 36% rise. Net profit attributable to shareholders for the quarter fell slightly by 7% to $163.56 (2017: %175.42 million)

Earnings per share for the period amounted to $0.52 (2017: $0.38). EPS for the quarter amounted to $0.15 (2017: $0.16), while the twelve-month trailing earnings per share amounted to $0.73. The number of shares utilized in the computations amounted to 1,122,144,036 units. JP stock last traded on November 12, 2018 at $24.33.

Furthermore, JP stated that, “Our juice, bakery and snack businesses are all undertaking structured continuous improvement initiatives that include new production lines, product and packaging innovation and improved sales and marketing activities. We expect these investments to continue to drive earnings growth.”

Balance Sheet Highlights:

As at September 30, 2018, the Company’s Assets totalled $34.78 billion, 10% more than its value of $31.59 billion a year ago. This increase in total assets was due largely to increases in ‘Securities Purchased Under Resale Agreements’ and ‘Property, Plant and Equipment’. ‘Property, Plant and Equipment’ and ‘Securities Purchased Under Resale Agreements’ as at September 30, 2018 amounted to $21.57 billion (2017: $20.76 billion)  and $4.37 million (2017: $3.28 billion) respectively. Short-term investments and accounts receivables also contributed to the overall growth with a $499.32 million and $631.83 million increase year voer year.

The company ended the period with equity attributable to equity holders of the parent in the amount of $12 billion relative to $11.10 billion in 2017. The company now has a book value per share of $10.69 versus $9.89 in 2017.



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