Jamaica Broilers outlook positive despite earnings dip
Published:Wednesday | March 11, 2020 | 12:17 AM
Poultry producer Jamaica Broilers Group, JBG, says it has dealt with the issues that negatively impacted its last quarter, including currency losses and depressed markets in Haiti.
Now it’s keeping watch on the coronavirus, but is bullish about the company’s performance in the periods ahead.
“Overall, the outlook for the company is very positive. The growth in the US markets continues, and the Best Dressed Chicken operation in South Carolina provides some exciting potential for the future,” said Ian Parsard, senior vice-president for finance for Jamaica Broilers.
“We are paying close attention to the developments of the coronavirus, internationally as well as in the region. The implications for Jamaica could be significant, given our tourist industry and the linkages into the local economy. The developments on the global stage are also being examined carefully for potential impact on our international businesses. At this time, our greatest asset is being flexible and doing fast execution,” he said.
The group made $470 million in net profit on sales of $14.3 billion for its January quarter, a lower outcome than the $763 million profit on sales of $14.6 billion a year earlier.
Over nine months, sales were flat at $40.6 billion, compared to $40.3 billion in the 2018 period. Profit dipped to $1.1 billion from $1.4 billion.
“The relatively flat sales is due primarily to disruptions in Haiti. We lost sales, as distribution of our table eggs into the markets we served were at times impossible,” Parsard said.
On the foreign currency side, the company experienced foreign exchange movements of $226 million, and is now considering hedging against future currency exposure.
“FX losses associated with transactions such as purchases of US dollars are also expected to reduce significantly, as we have modified our procedures which now require approval at the senior executive level before execution.
“Additionally, we are working with various financial partners to implement hedging strategies to reduce variability in FX purchases. We are confident that the levels of FX losses going forward will be minimised,” the company said.
The group operates in three main regions – Jamaica, the United States, and Haiti. Operating profit improved by four per cent for Jamaica, but the US results dipped by nine per cent, due in part to increased costs associated with the acquisition of the processing plant in South Carolina.
Haiti made an operating loss of $92 million compared to a prior-year operating profit of $146 million.
Parsard that since January, the results from Haiti have been encouraging, but the group continues to monitor the situation carefully, and additional risk-mitigation strategies are being implemented to ensure the operations stay resilient.
Overall, the group produced an operating profit of $2.2 billion.