Jamaica Broilers profits impaired by COVID-19

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Jamaica Broilers profits impaired by COVID-19

Wednesday, July 15, 2020

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The Jamaica Broilers Group (JBG) recorded a massive 41 per cent decline in net profits ending its 2019 financial year in May, recording $1.4 billion in net profit attributable to shareholders.

The poultry processor, which operates in Jamaica, the United States, Haiti, and other Caribbean territories, had a minuscule increase in revenue, which totalled $55.7 billion.

As a result of this flat revenue, gross profits remained relatively unchanged for 2019 at $14.6 billion as the year before.

Other income fell by 37 per cent to $366.5 million, which was due to the absence of gain on acquisition that occurred in 2019. Distribution costs were lower during the period under review, but administrative expenses and other expenses climbed by 10 per cent to a record $9.84 billion.

These increased costs drove a 17 per cent decline in the group's operating profit to $3 billion. A 90 per cent decline in finance income, increased finance costs, and lower taxes pushed net profits to $1.36 billion compared to the $2.37 billion recorded in the prior year.

This left the earnings per share for the financial year 2019/2020 at $1.37 versus $2.30 in the prior year. These results included the acquisition of Gentry Poultry Inc (renamed The Best Dressed Chicken Inc) last September, which contributed $1.97 billion in revenues and profits of $25.18 million.

Based on a comparison between the third-quarter results for January 2020 and the 2019/2020 audited financials, JBG generated $222.7 million in net profits for the fourth quarter when compared with the $966.6 million earned in the prior year.

Total assets for JBG climbed by 24 per cent to $44.23 billion, driven by a 28 per cent increase in the current asset base that totalled $28.6 billion. Total liabilities grew by 35 per cent $28.27 billion, mainly due to a sharp rise in current liabilities where payables and borrowings rose by 48 per cent and 45 per cent to $9.38 and $9.65 billion, respectively.

Shareholder's equity grew by eight per cent to $15.9 billion for the 2019/2020. Regarding the impact by COVID-19, JBG has seen an increase in inventory, biological assets, and receivables, which has led to a higher impairment provision.

SEGMENT RESULTS

The group's USA operations recorded higher revenues for 2019/2020, while the Jamaican and Haitian segments recorded minor declines. However, all segments recorded a decrease in operating results for the period under review.

The Jamaican arm generated $3.17 billion in operating revenues, while the US operations had $1.49 billion in revenues. The Haitian segment saw a 67 per cent decline in their segment result to $57 million, due mainly due to the instability, which happened in the country.

— David Rose


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