Johnston
Andrew Green, Staff Reporter
JAMAICA PRODUCERS Group Limited recorded a net profit of $682.3 million on revenues of $14.02 billion for the 40 weeks ended October 4, 2003.
Revenues increased by 30.2 per cent, and net profit increased by 71.9 per cent over the comparable period last year. Chairman Charles Johnston stated in his comments accompanying the unaudited results that this performance was achieved in a period of intense price-based competition among United Kingdom supermarkets, which is its core customer base.
American retailer Wal-Mart has entered the UK market and cut prices to gain market share, managing director of the Jamaica Producers Group, Dr. Marshall Hall, told Wednesday Business.
SUPPLY PRICES
"Major UK supermarkets have, in turn, sought to force down supply prices across the fresh food sector," Mr. Johnston said in the report. "In this environment, our UK banana and fresh produce distribution businesses have been successful at gaining market share, but have done so under considerable margin pressure."
"The fresh and processed juice business continues to do well," Dr. Hall said. "That is now bigger than the banana business."
The Fresh and Processed Foods Division recorded revenues of $7.5 billion and profits of $296.3 million as compared with $5.5 billion of revenues and $337.9 million of profits for the comparable period last year, Mr. Johnston stated. The division recorded particularly strong results in its fresh juice and smoothie lines.
The main activities of the Group during the period consisted of the cultivation, marketing and distribution of bananas and other fresh produce locally and overseas, juice manufacturing and distribution, shipping and the holding of investments.
The Banana Division generated revenues of $6.3 billion and profits of $70.8 million as compared with revenues of $5.2 billion and profits of $233.9 million for the same period last year, Mr. Johnston stated.
"It was not as great a year as expected for the Banana Division," Dr. Hall said. "We will have to do some belt tightening in some of our operations in the UK."
Producers distributes about 140,000 tons of bananas annually with one-third of that coming from Jamaica, another third from Cameroon and the balance split between the Dominican Republic and Costa Rica. "We are pleased about the reorganisation of operations in Jamaica," Dr. Hall said. "Our costs are competitive."
The problem for the Banana Division is that the price for the fruit in the UK has fallen, and the bulk of business done by this division is carried out there.
Producers has got a big boost from its Corporate segment last year. This generated a profit of $431.8 million for the 40 weeks as compared with $126.7 million for the same period last year.
The Corporate segment generated pre-tax profits of $228.7 million in all of 2002, primarily due to a substantial increase in the level of investment income and disposal gains.
QUOTED EQUITIES
At the end of 2002, the revenues of quoted equities in the portfolio was $1.27 billion, compared with $675.0 million the previous year.
At the start of its 2003 financial year, unquoted equities included, at cost, Jamaica Money Market Brokers (JMMB) shares with a market value of $344.25 million, calculated at the JMMB December offer price. Producers realised gains from the sale of JMMB shares after its listing on the Jamaica Stock Exchange in January, the amount being included in the 2003 accounts.
"A big chunk of what is in Corporate would come from the sale of the JMMB shares," Dr. Hall said. But it includes all of the group investments, which includes fixed interest securities investments.
Producers made a $5.6 million foreign exchange loss for the period.
"For the year as a whole you won't see gains from the exchange rate," Dr. Hall said, "but there would be gains in terms of the UK earnings."
