JP Group doubles profit, commits to maintaining investment programme
August 18, 2021
The Jamaica Producers (JP) Group is reporting net profits of $774 million for its second quarter ended July 2021 — more than doubling the $378 million out-turn for the comparative period in 2020 in a performance buoyed by solid results in both JP Group’s business lines. It’s second-quarter revenue of $5.9 billion was up 36 per cent over the prior year. Net profit attributable to shareholders was up 178 per cent to $353 million.
Jamaica Producers owns and operates interests in logistics, port terminal operations, food and drink production, and agri-business through its Logistics and Infrastructure (L&I) and Food and Drink (F&D) divisions. Jeffrey Hall CEO of Jamaica Producers says the company “is now exceptionally well positioned to capitalise on trading opportunities in the logistics sector”.
Hall noted, however, that management is aware that inflation, supply chain shocks, and economic uncertainty related to the uneven management of the novel coronavirus pandemic will present general business challenges in the short term. Despite these challenges, JP Group has decided to maintain an aggressive investment programme.
“We will definitely be continuing our programme of selective capital investment projects and acquisitions,” Hall stated. The acquisition strategy will continue with JP Group identifying and acquiring other logistics services that support trade with the Caribbean, as well as food and drink businesses in large markets that present new growth opportunities for the group. According to Hall: “The Caribbean is highly trade-dependent so we see a strong and continuing role for our logistics businesses.”
During the second quarter, JP completed the joint venture acquisition of Geest Line Limited, a shipping line serving Europe and the Caribbean. In addition, core capital investments in the terminal, cranes, and warehousing at Kingston Wharves and filling lines at Hoogesteger (in Europe) are designed to expand capacity, gain market share, and drive efficiency in JP Group’s two largest businesses.
“With shareholders’ equity of $16.9 billion (an increase of 17 per cent relative to the prior year) and net cash and investments of $10.1 billion, we believe that the JP Group has the balance sheet strength to support its strategy,” Hall said.
Regarding the performance of each business segment during the second quarter of 2021, the Logistics and Infrastructure Division accounted for the major share of the group’s net assets and, in turn, its profits during the second quarter under review. JP’s Food and Drink Division was the largest contributor to the revenues of the group.
The Logistics and Infrastructure Division generated 2021 year-to-date profit before finance cost and taxation of $1.7 billion, a 31 per cent increase over the prior year. Divisional revenues of $4.6 billion were up 22 per cent over the prior year. This division continues to benefit from a series of initiatives to develop Kingston Wharves. During the second quarter, Kingston Wharves benefited from growing volumes of bulk and breakbulk cargo, and automotive shipments to Jamaica and the region.
Meanwhile, JP Group’s Food and Drink Division earned 2021 year-to-date profit before finance cost and taxation of $164 million, a 43 per cent increase on the prior year’s result of $115 million.
The segment registered year-to-date gross revenues of $6.8 billion, a 19 per cent increase on the $5.7 billion recorded in the comparative period of 2020.
The F&D Division comprises JP Group’s portfolio of subsidiaries that are engaged in farming, food processing, distribution, and retail of food and drink. It has production facilities in Europe and the Caribbean and operates a distribution centre in the United States.
During the second quarter and year-to-date, the division benefited from a solid performance in JP Group’s European juice business, and growth in the snacks, fresh produce, baked goods, and prepared tropical frozen food business serving the US market. “These businesses have benefited from strong supermarket sales and improved consumer confidence arising from wage and GDP [gross domestic product] growth and advancing vaccination programmes,” the JP Group CEO stated.
Performance in these channels more than offset challenging trading conditions in convenience and commuter channels for the tropical foods business in Jamaica (due to school closures and curfews) and travel retail across the Caribbean.
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