GKG reports record first-quarter results

Business

GKG reports record first-quarter results

$28.85 billion in revenues despite COVID-19 effects

BY KELLARAY MILES
Business reporter
milesk@jamaicaobserver.com

Wednesday, May 20, 2020

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The GraceKennedy Group (GKG) has reported increased revenues of $28.85 billion for the first quarter of this financial year. This represents 11.3 per cent or some $2.93 billion more in revenues when compared to the similar period last year.

The food and financial services conglomerate said that while they, like other companies, will be impacted by the effects of the ongoing COVID-19 pandemic, they have been able so far to weather the repercussions of the debilitating virus.

Group CEO Don Wehby said that the company's status as a provider of essential services (manufacturing, distribution and retailing of food products, and remittance, banking and other financial services) has enabled the group to keep its operations going.

“GraceKennedy, being a diversified group, has so far been able to manage the impact of the system-wide risk of the COVID-19 pandemic on our group's performance. As we navigate this period of great uncertainty we continue to adjust our structure to be nimble and agile,” he said.

In its analysis of group performance, the financials showed that the domestic foods distribution business experienced growth in both revenue and pre-tax profits, coupled with improved margins and growth for Hi-Lo Food Stores and Catherine's Peak spring water. GraceKennedy Foods (USA) LLC, Grace Foods UK and Grace Foods Canada all reported increased revenue for the three-month period, when compared to the corresponding period last year.

For its Financial Services division the group also said that First Global Bank (FGB) experienced strong growth in its loan and deposit portfolios, likewise reporting strong performance in the insurance segment and noting the success of its acquisition of a 65 per cent stake in Key Insurance. The money services segment reported an increase in both revenue and pre-tax profit, citing an increase of over 100 per cent in the use of its digital remittance channels.

The company said that amidst the uncertainty associated with the pandemic, the results of its first-quarter performance for the first three months of this year have seen some of the best results in recent times, stemming from the strong performance evidenced in all key areas.

For the period ended March 31st net profit stood at $ 1.45 billion — $435 million (42.8 per cent) more than that last year and earnings per stock unit was $1.33.

COVID-19 RESPONSE

The GKG, as part of its corporate social responsibility, said that it has been playing its part in providing relief support to the communities and countries in which it operates. In Jamaica, financial support to the tune of some $10 million was made towards the Private Sector Organisation of Jamaica (PSOJ) initiative to purchase ventilators for the island's hospitals, among other items. Through the GraceKennedy Foundation's 'Feed the Future Initiative' the group has also been providing food packages to stranded university students, noting also their support of small farmers affected by the pandemic.

The group said that its overseas subsidiaries were also providing support to communities, including the provision of food to first responders, front line health care staff, and displaced hospital workers in the respective countries where they operate.

“Our financial performance is important, but so is GK's 'we care' ethos. There is great need as a result of this pandemic, and where we can, we have been playing our part in assisting.

“It is a very challenging time for GK, but I am proud to say that our great team has pulled even more closely together to face the challenge head-on. I thank them for their commitment and hard work, in the true spirit of 'we care'. Despite the uncertainties that exist, we are confident that we will emerge stronger together from this crisis,” Wehby said.


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