JP Reports 65% Rise in Six Months Profits Attributable to Shareholders

Date: August 14, 2018

Jamaica Producers Group Limited (JP), for the six months ended June 30, 2018, experienced a 25% increase in revenue to total $9.29 billion compared to the $7.40 billion reported in 2017. The company posted second quarter revenue of $4.81 billion a 20% increase (2017: $4 billion). The company noted, “Food & Drink and Logistics & Infrastructure lines of business have strong hard currency revenues and serve geographically diverse markets.”

The Food & Drink Division contributed a 35% increase in revenue to total $5.46 billion relative to the $4.04 billion reported in 2017. The company mentioned that, “The Food & Drink Division benefitted from particularly 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 reflected our ongoing investment in innovation and new product development. In Europe, we expanded our range of healthy fresh juice recipes with highly innovative vegetable juices, and in our tropical snacks business, we launched a new line of frozen “ready-to-cook” tropical foods for the US market.”

Jamaica Producers also noted that, “We expect the benefits of our Division-wide product innovation programme to continue with the launch of “rum cake bites” under the Tortuga brand. We expect this product to drive sales growth during the winter tourism season.”

Logistics and Infrastructure increased 14% year over year to total $3.83 billion (2017: $3.36 billion). JP highlighted 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.”

The Corporate Services division earned $51.24 million relative to $40.51 million in 2017, a 26% increase. The company indicated that, “The Corporate Services division reflect increased costs and accruals associated with special investment projects which were more than offset by the trading growth in other divisions.”

The cost of sales for the six months increased by 27% to total $6.43 billion compared to $5.08 billion reported for the comparable period in 2017. As a result, Gross Profits increased to total $2.85 billion, a 23% growth on the $2.32 billion documented in 2017. Gross profit for the second quarter amounted $1.52 billion compared to $1.23 billion booked for the same quarter of 2017. Other income increased to $153.45 million, a 66% growth relative to the prior corresponding period.

JP’s marketing, selling and distribution expenses rose 14% to close at $1.64 billion, this compares to $1.43 billion booked a year earlier. JP also recorded a share of profit in joint venture and associated company of $33.02 million, relative to a loss of $2.23 million in the previous year.

Finance cost was reported at $187.98 million for the period relative to the $142.04 reported in 2017. This resulted in a profit before taxation of $1.21 billion for the period (2017: $836.71 million).  Profit before tax for the second quarter totalled $739.11 million versus $471.95 million reported for the same quarter of 2017.

The company incurred tax charges of $317.78 million (2017: $166.48 million). Consequently, Net Profit for the period rose 34% to $896.43 million (2017: $670.23 million). Notably, net profit attributable to stockholders totalled $414.59 million; this compared to $251.04 million a 65% rise. Net Profit attributable to shareholders for the quarter climbed 67% to total $262.97 million relative to the $157.93 million 2017.

Earnings per share for the period amounted to $0.37 (2017: $0.22). EPS for the quarter amounted to $0.23 (2017: $0.14), while the twelve-month trailing earnings per share amounted to $0.74. The number of shares utilized in the computations amounted to 1,122,144,036 units. JP stock last traded on August 13, 2018 at $16.75.

The company mentioned that, “Jamaica Producers Group and its subsidiaries will continue a programme of investment that is designed to improve its product and service offering while enhancing its operating efficiency. In line with this programme of investment, Kingston Wharves will continue to distinguish itself based on its service levels and its ability to handle a wide range of different types of domestic and transhipment cargo. Accordingly, we are improving the organisation of the shipping terminal and introducing a range of protocols to streamline our systems to allow cargo to be loaded, discharged and processed with less wait time, while providing our customers with an improved overall customer experience. 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.”

Balance Sheet Highlights:

As at June 30, 2018, the company’s assets totalled $33.76 billion, 13% more than its value of $30 billion a year ago. This increase in total assets was due largely to increases in ‘Property, Plant and Equipment’ and ‘Securities Purchased Under Resale Agreements’. ‘Property, Plant and Equipment’ and ‘Securities Purchased Under Resale Agreements’ as at June 30, 2018 amounted to $21.33 billion (2017: $20.04 billion) and $4.25 billion (2017: $2.87 billion) respectively.

The company ended the period with equity attributable to equity holders of the parent in the amount of $11.64 billion relative to $10.83 billion in 2017. The company now has a book value per share of $10.37 versus $9.65 in 2017.




Analyst Certification -This research report is for information purposes only and should not be construed as a recommendation. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.