May 11, 2020
Jamaica Producers Group Limited (JP), for the three months ended March 31, 2020, booked an 8% increase in revenue to total $5.15 billion compared to the $4.79 billion reported in 2019. JP stated, “As a result of the emerging adverse impact of the COVID-19 pandemic on the global economy, the performance of the Group was mixed.”
The Food and Drink Division reported a 12% increase in revenue to total $3.07 billion relative to $2.75 billion reported in 2019. The Group stated that, “During the first quarter, the Division experienced reduced food sales in travel retail, food service and convenience channels, but this was more than offset by increased sales in supermarkets. Regrettably, our cost of operations was adversely affected by extraordinary measures to maintain our customarily strong service levels across all aspects of our international fresh fruit and vegetable supply chain and food processing facilities during COVID-19.”
Logistics and Infrastructure increased by 2% year over year to total $2.09 billion (2019: $2.04 billion). The Group highlighted that, “During the first quarter, a general slow-down in global trade impacted the volume of trans-shipment containerized cargo handled by the terminal. This was offset by growth in value-added logistics services, including the storage of excess inventory of durable goods for global markets.”
The Corporate Services division earned $22.65 million relative to $22.26 million in 2019, a 2% increase.
Cost of sales closed the three months ended March 31, 2020 at $3.55 billion, a 13% increase when compared to $3.14 billion reported for the comparable period in 2019. As a result, gross profit decreased to close at $1.60 billion, a 3% reduction from $1.65 billion documented in 2019.
Other income for the three months end March 31, 2020 amounted to $154.70 million relative to other expenses of $27.83 million for the three months ended March 31, 2020.
JP’s selling, administration, and other operating expenses rose 10% to close at $966.23 million, this compares to $876.63 million booked a year earlier. JP also recorded an operating profit of $788.57 million for the first quarter ended March 31, 2020 (2019: $746.33 million) representing a 6% increase. While, the share of loss in joint venture amounted to $4.54 million relative to a profit of $453,000 reported in the previous corresponding period.
Finance cost was reported at $71.60 million for the three months ended March 31, 2020, relative to the $79.02 million reported in 2019. As such, profit before taxation amounted to $712.44 million for the period (2019: $667.77 million).
The Group incurred tax charges of $152.94 million (2019: $156.61 million). Consequently, net profit for the period rose by 9% to close at $559.49 million (2019: $511.15 million). Notably, net profit attributable to shareholders, for the quarter ended March 31, 2020, totalled $220.01 million; a 4% decrease from the $230.38 million reported in the prior year’s corresponding period. Total comprehensive income amounted to $600.69 million (2018: $440.72 million).
Earnings per share for the period amounted to $0.20 (2019: $0.21), while the twelve-month trailing earnings per share amounted to $1.06. The number of shares utilized in the computations amounted to 1,122,144,036 units. JP stock last traded on May 11, 2020 at $19.32.
JP mentioned that, “JP Shipping Services Limited handles the consolidation and shipping of commercial cargo, personal effects and vehicles between the UK and CARICOM countries on a weekly or fortnightly basis. Lockdowns and other restrictions on movement and business activity in both the UK and the Caribbean, as a result of COVID-19, reduced the volume of cargo available for shipment and adversely affected this business during the first quarter.”
Balance Sheet Highlights:
As at March 31, 2020, the Group’s asset base totalled $38.49 billion, 6% more than its value of $36.40 billion a year ago. This increase was due largely to increases in ‘Securities purchased under resale agreements’ which closed at $5.48 billion (2019: $4.30 billion).
The Group ended the period with equity attributable to shareholders in the amount of $14.09 billion relative to $12.28 billion in 2019. The company now has a book value per share of $12.56 versus $10.94 in 2019.
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer(s) or securities as at the date of this report. 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.