Jamaica Producers Group Limited (JP)

For the six months ended June 30, 2017:

• For six months ended June 30, 2017, Jamaica Producers Group Limited (JP) experienced a 62% increase in revenue to total $7.40 billion compared to the $4.57 billion reported in 2016. The company posted second quarter revenue of $4 billion a 66% increase (2016: $2.41 billion). According to the company “Revenues were roughly evenly split between the Group’s two divisions Logistics & Infrastructure (“L&I”) and Food & Drink (“F&D”). In line with the strong performance of Kingston Wharves, the largest of the Group’s subsidiaries (in terms of assets).”

• The Food & Drink Division had a $14.82 million reduction in revenue to total $4.04 billion relative to the $4.06 billion reported in 2016. The Food and Drink Division “comprises businesses that are engaged in agriculture, processing, distribution and/or retail of food and drink.”

• Logistics and Infrastructure increased $2.88 billion or 598% year over year to total $3.36 billion (2016: $481.47 million). This increase was associated with the addition of Kingston Wharves to the Profit and Loss as a subsidiary. “During the first half of 2016, Kingston Wharves was classified as an associate for accounting purposes and consequently only JP’s 42% share of earnings was brought into the divisional Profit and Loss Account. With effect from June 23, 2016, this company has been treated as a subsidiary for accounting purposes.”

• The Corporate Services division earned $40.51 million relative to $32.87 million in 2016, a 23% increase. The company indicated, “This comprises interest and investment income, net of the cost of corporate functions not directly charged to business units.”

• The cost of sales for the six months increased by 38% to total $5.08 billion compared to $3.68 billion reported for the comparable period in 2016. As a result, Gross Profits increased to total $2.32 billion, a 160% growth on the $894.09 million documented in 2016. Other income year over year increased from $69.43 million to $92.47 million, a 33% increase.

• JP’s administration, selling and other operating expenses rose 47% to close at $1.43 billion, this compares to $975.31 million booked a year earlier. JP also recorded a share of loss in joint venture and associated company of $2.23 million, relative to a profit of $362.35 million in the previous year.

• Finance cost was reported at $142.04 million for the period relative to the $94.36 reported in 2016. This resulted in a profit before taxation of $836.71 million for the period (2016: $2.81 billion).  Of note, the company had recorded a one-off gain on recognition of subsidiary of $2.46 billion in 2016.

• The company incurred tax charges of $166.48 million (2016: $74.24 million), resulting in Net Profit for the period declining 75% to $670.23 million (2016: $2.64 billion). Notably, net profit attributable to stockholders totaled $251.04 million; this compared to $2.71 billion a 349% decline. Net Profit attributable to shareholders for the quarter declined 94% to total $157.93 million relative to the $2.60 billion 2016.

• Earnings per share for the period amounted to $0.22 (2016: $2.41), EPS for the quarter amounted to $0.14 (2016: $2.28), while the trailing earnings per share amounted to $1.32. The number of shares utilized in the computations amounted to 1,122,144,036 units.

• “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, prior to the end of this year, Kingston Wharves will launch new logistics facilities for the warehousing of general cargo, and the storage of bulk and automotive cargo for domestic and transhipment markets. At the same time, our JP Tropical Group will commission new state-of-the-art cold storage and ripening facilities at Retirement Road for its banana and pineapple business and will introduce a new variety of our classic St. Mary’s banana chip for the first time in 20 years. We will also relocate our head office activities from Oxford Road in New Kingston to the locations in Kingston where our operations are centred. This will mean that we will enter the 2018 financial year operating from purpose-built corporate offices in Newport West with a lower overhead cost base.”

Balance Sheet Highlights:

• As at June 30, 2017, the company’s assets totaled $30 billion, 11% more than its value of $27.08 million a year ago. This increase in total assets was due largely to an increase in Non-Current assets of $2.56 billion a 12% increase.

• The company ended the period with equity attributable to equity holders of the parent in the amount of $10.83 billion relative to $9.33 billion in 2016. The company now has a book value per share of $9.65 versus $8.32 in 2016.

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