Durrant Pate/Contributor

Questions are mounting whether the accounting books for Jamaica Broilers Group’s (JBG) operations in the United States were doctored to give a better performance than the true state of affairs, or were mere financial and/or accounting errors made in innocence.

However, JBG, Jamaica’s largest poultry company, is shying away from admitting to any willful act but acknowledged, “unsubstantiated accounting valuation methodologies affecting several financial statement line items, including inventories and biological assets”.

“The issues identified appear to constitute material prior period errors and will, once determined and finalised, be fully corrected following the conclusion of the annual financial audit for the company,” the group continued.

In a regulatory filing with the Jamaica Stock Exchange (JSE), where its shares are publicly traded, JBG is seeking to explain what took place admitting that as a result of “the likely restatement of inventories and biological assets, it anticipates a material negative impact on the historical profitability of our US operations and the group’s consolidated retained earnings and capital.” 

The regulatory filing went on to say JBG wishes “to assure its shareholders and stakeholders that the board and senior management of the company have been, and are taking steps, in conjunction with its legal and financial advisors to address the above referenced issues related to the expense management, operational management and financial performance of the US operations with a focus on accurate reporting on the profitability of the US operations and for the company.”

Regulators being notified and updated

JBG has met with the JSE and is engaging with the Financial Services Commission (FSC) and will continue to keep the regulator entities, its shareholders, stakeholders and the investing public apprised of any information which may have a material financial impact on the company or its operations.

JGB reiterated that in its unaudited third quarter results for the period ended January 25, which was released to the JSE on March 26, the company had advised that it had identified several issues related to expense management and operational controls in its US operations and had engaged external advisors in the United States to review operational control and any implications it had for the financial performance of the operations there.

According to JBG, “having received preliminary and not yet finalised reports from its external advisors, and having assessed the financial performance of the US operations, the company wishes to disclose the following material information, in keeping with the JSE Rules, Appendix 8, which it believes could have significant implications for the financial statements of the company, namely unsubstantiated accounting valuation methodologies affecting several financial statement line items, including inventories and biological assets.”

Racked up J$1 billion in losses

For the January quarter, JBG racked up more than J$1 billion in losses, the first loss in the company’s nearly 70 years in business, which JBG president and CEO, Christopher Levy, said was due to a multitude of factors.

In a newspaper interview last April, Levy said the management became concerned about the US operations during the review of the group’s third quarter numbers, prior to their release on the market. 

This led to a revamping of the US systems, which were restructured to realign the subsidiaries. In addition, Levy’s brother, Stephen, the then-head of the US operations, resigned from both the board and the company, effective May 3.

His departure was announced in a market filing that was posted on the JSE website on February 28.

After two delays, JBG’s financial results for the third quarter were released on March 27, in which the company grew revenue by J$1 billion to J$24.6 billion, but its earnings went south, plummeting from a profit of J$1.3 billion in 2024 to a loss of J$1.15 billion. The loss came amid a large spike in operating expenses, from J$3.7 billion to J$5.2 billion.

As for the US operation, its contribution to the group’s operating profit also fell dramatically from J$2.98 billion to J$922 million over the combined nine-month period, ending January 2025.