Durrant Pate/Contributor

Manufacturing conglomerate, Jamaica Producers Group (JPG), experienced a remarkable half-year performance with net profit surging by 674 per cent to J$12.31 billion for the six months ended June 30, 2023.

This is up from the J$1.59 billion reported comparable period in 2022. Income tax expense is up 35 per cent to J$190.11 million (2022: J$293.21 million).

For the June second quarter, net profit closed on J$11.47 billion, up from J$779.72 million last year. Profit before finance cost and taxation for the six-months is J$12.57 billion, a 529 per cent increase relative to J$2 billion reported in 2022.

Finance cost 

Profit before finance cost and taxation for the second quarter amounted to J$11.48 billion (2022: J$998.75 million). Finance cost-interest totalled J$66.82 million, a 42 per cent decrease from the corresponding period last year (2022: J$114.61 million).

Profit before income tax for the half-year closed on J$12.50 billion, a 564 per cent increase relative to J$1.88 billion reported in 2022. Profit before income tax for the second quarter amounted to J$11.47 billion (2022: J$940.78 million).

Net profit attributable to shareholders of the company for the six months under review amounted to J$11.91 billion comparable with J$864.07 million in 2022.

According to the management, “the results for the second quarter and the first half reflect a significant increase relative to the same period in the previous year and can be attributed, in part, to the successful amalgamation of the businesses of PanJam Investment Limited and JPG to form the Pan Jamaica Group Limited.”

Amalgamation

This amalgamation became effective on April 1, 2023 (at the beginning of the second quarter) and involved the transfer of the operating businesses of JPG to PJG in exchange for a 34.5 per cent interest in PJG. PJG is now an associated company of JPG, and JPG’s associated company interest in PJG is now JPG’s single largest asset.

Earnings per share (EPS) for the six months amounted to J$10.61 (2022: EPS: J$0.77), while EPS for the quarter totalled J$10.22 (2022: EPS: J$0.41). Notably, JPG’s stock price closed the trading period on August 16, 2023, at a price of J$19.25 with a corresponding P/E ratio of 1.62x.

JPG reported a 51 per cent decrease in revenues, which totaled J$7.09 billion for the half-year compared to J$14.39 billion in the corresponding period last year. Revenues for the second quarter went down 100 per cent to close at J$28.41 million compared to J$7.48 billion for the comparable quarter of 2022.

‘Cost of Sales’ amounted to J$5.06 billion (2022: J$10.39 billion), this represents a decrease of 51 per cent year-over-year. Consequently, gross profit decreased by 49 per cent to J$2.03 billion compared to J$4.00 billion for the half-year.

The company booked gross profit of J$28.41 million for the second quarter versus J$2.08 billion reported for the similar quarter of 2022. Administrative expenses decreased by 42 per cent to close at J$1.38 billion (2022: J$2.39 billion).

Other income increased 276 per cent to close J$211.37 million relative to the J$56.25 million in 2022.

Marked decline in operating profit

Operating profit went down by 48 per cent from $1.66 billion in 2022 to $860.19 million in the period under review, while for the quarter, operating profit Is J$21.92 million (2022: J$807.63 million). Share of profit in associated company and joint venture company for the six months amounted to J$620.71 million, an 84 per cent increase relative to J$337.40 million reported in 2022.

As for the June quarter, share of profit in associated company and joint venture company totalled J$371.17 million versus J$191.12 million booked in 2022. Gain on disposal of associate amounted to $11.09 billion (2022: nil).

JPG’s assets totalled J$31.85 billion (2022: J$44.97 billion). This decline was primarily due to ‘Property, Plant and Equipment’ decreasing by J$22.76 billion to close at J$139.43 million (2022: J$22.90 billion).

Shareholder’s equity was J$31.39 billion (2022: J$18.43 billion), representing a book value per share of J$27.97 (2022: $J16.43).