Revenues up 20% to total $11.40 billion for half-year period

Shareholders of Jamaican conglomerate, Jamaica Producers’ Group (JPG) are getting a 128 per cent rise in profits attributable to them for the June quarter.

Net profit attributable to shareholders for the quarter rose to $353.08 million relative to the $126.96 million for the comparable period 2020. Net profit for the half year period rose 43 per cent to $1.34 billion coming from the 2020 booking of $938.19 million.

Notably, net profit attributable to stockholders for the half year totalled $609.58 million compared to $346.97 million, representing a 76 per cent increase. The company incurred tax charges of $319.33 million, up from $216.11 million in 2020.

Total comprehensive income for the six months ended June 30, 2021 amounted to $1.50 billion, up from $1.26 billion in 2020. Meanwhile for the June quarter, total comprehensive income totalled $987.26 million, up from $657.30 million in 2020.

Revenues heading in right direction

JPG experienced a 20 per cent increase in revenue to total $11.40 billion for the half year compared to the $9.52 billion reported in 2020. The company posted second quarter revenue of $5.92 billion, a 36 per cent increase on 2020’s $4.36 billion.

Commenting about the quarterly and half year performance, the management reports that, “during the second quarter, JPG completed the acquisition of a 50 per cent interest in Geest Line Limited (“Geest”). Geest has been in business for over 60 years and operates a fleet of ships that move refrigerated cargo as well as industrial and consumer goods and vehicles between the Caribbean, South America and Europe”.

The business is headquartered in Portsmouth, England. Sealines Holding N.V., a member of the Seatrade Group and a worldwide leader in reefer vessel shipping services, holds the remaining 50 per cent interest in Geest.”

Performance of various divisions

The revenue for the Food & Drink Division grew 18 per cent to total $6.81 billion relative to the $5.76 billion reported in 2020. Revenue in the Logistics and Infrastructure Division rose 22 per cent year over year to total $4.60 billion (2020: $3.76 billion).

The Corporate Services division earned $66.32 million relative to $45.17 million in 2020, a 47 per cent increase. The management underscored that, “we view the diversity of our business as strength. We are aware, however, that inflation, supply chain shocks and economic uncertainty related to the uneven management of the COVID-19 pandemic will all present general business challenges in the short term”.

The management team articulated that they have seriously considered the current trading conditions and have positively decided to maintain an aggressive investment programme.

“Our strategy is to build on our core business capabilities in food and drink and logistics and infrastructure with selective capital investment projects and acquisitions. Core capital investments in our terminal, cranes and warehousing at Kingston Wharves and our filling lines at Hoogesteger are designed to expand capacity, gain market share and drive efficiency in our two largest businesses,” management reported.

Other financial highlights

The cost of sales for the six months increased by 21 per cent to total $8.11 billion compared to $6.79 billion reported for the comparable period in 2020. Nevertheless, gross profit rose to $3.29 billion, a 21 per cent uptick on the $2.72 billion documented in 2020.

Gross profit for the second quarter amounted $1.76 billion compared to $1.16 billion booked for the same quarter of 2020. Other income increased to $380.38 million, a six per cent growth relative to $360.41 million booked in the prior corresponding period.

JPG’s marketing, selling and distribution expenses rose four per cent to close at $1.93 billion, this compares to $1.77 billion booked a year earlier. JPG also recorded a share of gain in joint venture and associated company of $48.08 million, relative to loss of $4.16 million in the previous year.

Finance cost was reported at $125.47 million for the period relative to the $148.94 million reported in 2020. This resulted in a profit before taxation of $1.66 billion for the period (2020: $1.15 billion). 

Profit before tax for the second quarter totalled $964.26 million versus $441.86 million reported for the same quarter of 2020. Earnings Per Share (EPS) for the period amounted to $0.54 (2020: $0.31). EPS for the quarter amounted to $0.31 (2020: $0.11), while the twelve-month trailing earnings per share amounted to $2.17.

As at June 30, 2021, the company’s assets totalled $42.18 billion, eight per cent more than its value of $38.98 billion a year ago. This increase in total assets was due largely to increases in ‘Securities Purchased Under Resale Agreements’ which amounted to $8.85 billion (2020: $5.86 billion) and ‘Property, Plant and Equipment’ which ended at $22.95 billion (2020: $22.27 billion), respectively.