Revenues up 26% and profits up 42%

Jamaica Producers (JP) reported strong performance and results for the 26-week period ended July 2, 2022.

JP earned consolidated net profits of $1.6 billion from revenues of $14.4 billion and increased revenues by 26 per cent over the prior year, with sales and earnings growth in both their business segments – Logistics & Infrastructure (L&I) and Food & Drink (F&D). The L&I Division is a diversified multinational logistics group and accounts for the major share of the Group’s net assets and, in turn, its profits. The F&D Division is the largest contributor to the overall revenues of the Group.

Year-to-date net profit attributable to shareholders was $864 million, an increase of 42 per cent over the prior year.

Jamaica Producers Group Limited has been intentionally organised to generate revenues from a diverse range of business lines and, importantly, a diverse range of markets.

“JP’s First Half performance clearly demonstrated the resilience of our business model. Our portfolio of businesses cuts across multiple business lines and multiple geographies,” said JP CEO Jeffrey Hall.

“We built the portfolio to withstand shocks like those we are currently experiencing. JP experienced revenue growth and earnings growth in both our business lines – Logistics & Infrastructure and Food & Drink. Both divisions benefitted from our strategic acquisition programme and ongoing business development initiatives. JP has acquired ownership or joint venture interests in four businesses over the last eighteen months. These acquisitions are evenly split between Logistics & Infrastructure on the one hand and Food & Drink on the other. Two of the acquisitions are based in Europe and two in the Americas. JP’s continued strong growth in shareholder earnings and strong balance sheet, position the business well for the future.”

LOGISTICS AND INFRASTRUCTURE

The Division includes the company’s interests in port terminal operations, warehousing and third-party logistics services (Kingston Wharves Limited), freight consolidation and forwarding (JP Shipping Services and Miami Freight and Shipping) and liner services (Geest Line). The Group’s logistics services all have a Caribbean connection but collectively serve a wide range of global markets. The L&I Division generated profit before finance cost and taxation for the 2022 First Half of $1.9 billion, a 13 per cent increase over the prior year.

Divisional revenues of $5.7 billion were up 24 per cent over the same period in the prior year. The improved performance reflects the Group’s strategy to build a diversified Caribbean logistics platform, through business development initiatives, capacity expansion and select acquisitions. The recently acquired UK-based joint venture shipping line – Geest Line – and Miami-based freight consolidation business – Miami Freight and Shipping – both contributed to the improved profitability of the Division.

Food & Drink

The Division earned year-to date profits before finance cost and taxation, for the First Half, of $283 million on revenues of $8.6 billion. Earnings increased 72 per cent and revenue increased 27 per cent relative to the prior year. The F&D Division now comprises their portfolio of businesses that are engaged in farming, manufacturing, distribution and retail of a wide range of food and drink. The Division has production facilities in Europe (The Netherlands and Spain) and the Caribbean (Jamaica and the Dominican Republic) and operates a distribution centre in the United States.

JP Farms business continues to lead in banana and pineapple production in Jamaica.

A.L. Hoogesteger Fresh Specialist B.V. (Hoogesteger) is the largest contributor to the revenues and profits of the Division. This business is a market leader in fresh juice in Northern Europe and serves as a co-packer of juice for major supermarket and food service entities in The Netherlands, Belgium, Scandinavia and Switzerland.

Future Outlook

The Group views the diversity of their business structure and operations as a strength. They are of the view, however, that inflation, supply chain shocks and disruptions to business confidence arising out of war, health-related restrictions, logistics challenges and adverse macroeconomic conditions all present general business challenges in the short term. The Group’s strategy is to build on their core business capabilities in Food & Drink and Logistics & Infrastructure through active engagement and strategic alignment with key customers, efficiency enhancing capital investment projects and selective acquisitions.

Core capital investments in their terminal, cranes and warehousing at Kingston Wharves are designed to expand capacity, gain market share and drive efficiency in the Group’s logistics businesses. Investment in food grade packaging lines, information technology systems, efficiency and hygiene, and health and safety are all expected to bolster the Food & Drink Division in the months ahead. The Group’s acquisition strategy will continue to see them identifying other logistics services that support trade with the Caribbean as well as Food & Drink businesses in markets that present definite new growth opportunities for the Group. With shareholders’ equity of $18.4 billion (an increase of nine per cent relative to the prior year) and net cash and investments of $11 billion, they believe that the Group has the balance sheet strength to support its strategy.