JP books $11b gain on merger

August 23, 2023

Jamaica Producers Group booked one-off profit of $11.4 billion for the June quarter, nearly all of which was due to the gain it made from the sale of its subsidiaries to Pan Jamaica Group.

The near century-old company, which was once a banana trader, has once again transitioned from being a food and logistics conglomerate to an investment holding company.

Jamaica Producers described the performance as record-beating’, although most of the profit came from the gain on disposal of operational assets which totalled $11.09 billion.

Under the deal, JP sold its operations to Pan Jamaica and became the latter company’s largest owner in return. Consequently, its revenue for the quarter amounted to just $28.4 million, compared to $7.48 billion a year earlier.

“Pan Jamaica Group is now an associated company of JP, and JP’s associated company interest in PJG is now JP’s single largest asset,” JP affirmed in its earning report.

In addition to its interest in Pan Jamaica, JP holds a treasury portfolio as well as land and property assets. The treasury portfolio primarily comprises fixed-income financial securities, while the property assets primarily include farmland and commercial holdings that are currently under lease.

“JP will seek to enhance the value of these property assets over time by developing them further and by diversifying the tenant base,” said the company, which continues to be led by Jeffrey Hall as managing director.

The group holds $31.4 billion in equity, but that falls to $18.4 billion once non-controlling interests are discounted.

On JP’s books, the merger resulted in a swap of $29 billion in long-term assets with $30 billion of interest in associates and joint ventures. Its current assets were slashed to $1.5 billion from $16 billion that was held mostly as repos and cash.

In turn, Pan Jamaica absorbed $10 billion in net cash from the acquisition of the new operations. It left Jamaica Producers with around $1.3 billion in cash and short-term investments as at June.

Both Pan Jam and Jamaica Producers were among the first companies to list on the stock market in February 1969 at the founding of the Jamaica Stock Exchange, and both remain as listed companies post-merger.

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