May 17, 2024
Jamaica Producers Limited (JP), for the first quarter ended March 31, 2024, reported a 99% decrease in turnover totaling $27.33 million compared to $7.06 billion in the corresponding quarter last year. This astronomical decrease in revenue is a ramification of the company’s changes in its operational structure, from an operational business to a holding company, which amalgamates the operating businesses of JPG with those of Pan Jamaica Group (“PJG”). This amalgamation became effective on April 1, 2023. It involved the transfer of JPG’s operating businesses to PJG in exchange for JPG receiving a 34.5% interest in PJG to become its single largest shareholder. PJG is now an associated company of JPG, and JPG’s associated company interest in PJG is now JPG’s single largest asset.
This amalgamation also resulted in a materially different performance review, in which the Group reported no cost of sales (2023: $5.06 billion). Gross Profit decreased by 99% to $27.33 million compared to $2.00 billion for the first quarter, which ended March 31, 2023.
Selling, administrative and other operating expenses decrease by 95% to close at $59.43 million (2023: $1.32 billion), while Operating Profit decreased from $838.27 million in 2023 to record an operating loss of $16.43 million for the quarter.
Share of profit in associated company and joint venture company for the first quarter amounted to $265.35 million, a 6% increase relative to $249.54 million reported in 2023.
Profit before finance cost and taxation for the quarter amounted to $248.92 million, a 77% decrease relative to the $1.09 billion reported in 2023. Finance Cost-Interest totalled $5.74 million, a 90% decrease from the corresponding period last year (2023: $57.15 million).
Profit Before Income Tax for the first quarter ended March 31, 2024, amounted to $243.19 million, a 76% decrease relative to $1.03 billion reported in 2023.
Income Tax Expense for the quarter had a 98% increase to reach $3.91 million (2023: $190.11 million). Net Profit for the quarter amounted to $239.27 million, a 72% decrease from the $840.55 million reported in 2023. Net profit attributable to shareholders for the quarter closed at $239.27 million (2023: $439.05 million).
Consequently, Earnings Per Share for the quarter amounted to $0.21 (2023: EPS: $0.39). The twelve-month trailing EPS was $13.65 and the number of shares used in these calculations was 1,122,144,036. Notably, JP’s stock price closed the trading period on May 17, 2024, at a price of $22.50 with a corresponding P/E ratio of 1.65x.
Balance Sheet Highlights
The company’s assets totalled $37.06 billion (2023: $51.88 billion). The changes in the company balance sheet structure are a result of the company divestiture of non-core operational assets in the amalgamation process that resulted in a $32.13 billion Interest in associated companies and joint venture increase in an 1844% YoY increase, closing the quarter at $32.13 billion (2023: $1.74 billion). There was also a 216% YoY material increase of $1.17 billion in Investment Property, closing the quarter at $1.72 billion (2023: $542.88 million). The 29% YoY decline in the total asset base can be attributed to the fair value assessment of the company’s Total Assets during the amalgamation process and the incumbent economic environment in which this transaction was done. As such, Accounts receivable witnessed a $4.54 billion decline, a 99% YoY decline to end the quarter at $34.93 million. Securities purchased under resale agreements declined $8.33 billion, ending the quarter at $350.98 million.
Shareholder’s equity was $36.55 billion (2023: $19.93 billion), representing a book value per share of $32.57 (2023: $17.76).
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