Ja Broilers recovers earnings lost to pandemic

Jamaica Broilers Group Limited, JBG, grew yearly earnings by 76 per cent to $2.4 billion, sufficient to recover the ground lost in 2020 during the pandemic, but the leading poultry producer’s profit performance was flat relative to 2019.

Revenue for year ending May 2, 2021 also improved, but by less than $2 billion, to $57 billion.

Jamaica Broilers’ operations in the United States and crisis-ridden Haiti both delivered improved revenue, but sales in Jamaica, the poultry company’s top market, dipped again by a billion dollars in FY 2021 amid a struggling economy still battling with the COVID-induced recession and an 8.9 per cent jobless rate.

Still, Jamaica set a new record in segment income, after expenses, contributing $4.47 billion to operating profit. The numbers reflect a 41 per cent improvement year- on-year. The US contributed $1.6 billion to operations, but Haiti, a country of around 11.5 million people, fell into losses for the first time since JBG gave that market its own geographic designation.

Broilers does not similarly disaggregate the contribution of the country operations to bottom line profit, which for the group was estimated at $2.4 billion in 2021, up from $1.36 billion in 2020, but barely outperforming the $2.37 billion of earnings reported in 2019.

“We had some loss of birds in Haiti and the insurance claim was made as a result of that,” said JBG Senior Vice-President of Finance Ian Parsard, in reference to a $236- million payout to the company from its insurance claim in the financial year just ended.

Parsard did not detail the incident in which the company lost the birds, which happened in April, but said that the loss was not associated with the years-long and ongoing political unrest in the country of some 11.5 million people.

Haiti is especially vulnerable to natural disasters and has suffered hits as lately as April and July, but while flood rains in April claimed at least three lives and damaged property, it’s unclear whether that was the event that claimed the company’s birds.

Already vulnerable due to the years-long political unrest, JBG restructured the Haiti operations to cauterise the decline in earnings there, but it still swung from operating profit of $171 million in 2019 to $57 million in 2020 to an operating loss of $7 million this year.

Jamaica Broilers has not replaced the birds it lost this year in Haiti. Rather, Parsard said that following the losses, the company in April took the decision to scale down operations in that market.

Haiti is even more so a wild card today, given the events of this month. Following the July 7 assassination of President Jovenel Moïse, the company lessened the number of staff that work from the Haiti Broilers SA complex in the capital Port-au-Prince to safeguard employees. JBG said it has maintained the staff count, but just has fewer people working from the office.

The Haitian subsidiary began the new financial year, which kicked off in early May, with reduced production of table eggs, down 30 per cent, due to the loss of birds in April. With table eggs accounting for 90 per cent of the business done by Haiti Broilers, its revenue contribution to the group will likely falter this year. The hatchery and feed mill continue to operate at capacity.

Amid the upheavals from the president’s assassination, the political and business climate in Haiti remain uncertain. But JBG had already indicated that its focus on growing the group was elsewhere, in the United States, where Parsard said a number of projects are being executed towards that goal.

“Those initiatives will continue,” he said.

JBG is spending US$3 million ($460 million) on a loading bay project and is in the middle of expanding its poultry-processing plant in South Carolina, United States.

karena.bennett@gleanerjm.com