GRACEKENNEDY HALF YEAR REVENUES UP $5.6b OR 16.5% OVER PRIOR YEAR ( - Company says performance better than planned; cites factors which had adverse impact )

KINGSTON, JAMAICA, July 31 

The GraceKennedy Group is reporting a ‘better than planned’ performance for the second quarter of 2015. Unaudited results show the Group achieving revenues of $39.3 billion, a 16.5% or $5.6 billion increase over the corresponding period.  Net profit declined by $380.9 million or 20.1% compared with the corresponding period of 2014.       The expectation is that there will be improved profitability for the rest of the year. Among the factors which negatively impacted the business are the transition of its new US Food operations – GraceKennedy Foods USA LLC, recognition of the total asset tax liability in the period, lower foreign exchange gains and higher finance costs.

GraceKennedy Group CEO noted, “The performance of our Foods business in Jamaica is the best it has been in many years, both in revenue and in profit.”  The ‘Grace on The Move’ campaign in Jamaica was credited with driving volumes for both the company’s manufacturing and distribution arms in Jamaica. The company’s Canadian and UK operations continue to expand distribution through prominent retailers in Canada, Germany and The Netherlands.  

Overall, the Food Trading segment was negatively impacted by the integration of the company’s US operations. “We made the investment in this acquisition and we knew that we were investing for growth. We knew that there will be challenges but we have the strategic and execution plans in place to ensure that our objectives are met,” said Mr Wehby. He noted that revenues have been good, and that the focus for the rest of 2015 is margin management and expense control.  “I remain very optimistic that this acquisition will be a game changer for the GraceKennedy Group,” he said.

First Global Bank recorded increased profits, delivering higher net interest and non-interest income, supported by growth in its loan and deposit portfolios. The Money Services segment had higher revenues as a result of higher remittance transactions in Jamaica. Profits were however flat due to investments in technology and efficiency reviews during the period. These investments are expected to yield even more benefits in the future.  The segment also received regulatory approval for a pilot of Mobile Wallet, an electronic payment service that will allow for payment transactions to be conducted via cellular phones, to be launched in September 2015.

In May 2015, GraceKennedy re-branded Jamaica International Insurance Company Limited and First Global Insurance Brokers Limited in Turks and Caicos to GK General Insurance Company Limited and GK Insurance Brokers Limited respectively. The Insurance segment had increased revenue, with GK General Insurance delivering higher underwriting results largely due to an improvement in claims. The segment was however impacted by lower foreign exchange gains.

Mr Wehby disclosed that as part of the Group’s strategic focus of expanding in the Food and Financial Services sectors, the decision was taken to sell its shares in Hardware & Lumber Limited. The GraceKennedy Group now comprises four business segments – Food, Finance, Insurance and Money Services - in keeping with the growth drivers of GK.   

Group CFO Frank James disclosed that on July 30, 2015 the Board of Directors approved a second interim dividend of 83 cents per stock unit to be paid on September 30, 2015, an increase of 6.4% over the corresponding period in 2014.  

In speaking to the results, the Group CEO said that GraceKennedy has invested for growth, and is confident that the investments will pay off.  “We have made significant strides in our goal of becoming a Global Consumer Group, as we continue to expand our reach in the North American and African food markets and our financial services division continues to offer innovative solutions to customers in the Caribbean region. We remain focused on ‘winning customers’ hearts and minds through great people’ and we thank all our stakeholders for their continued support, as we continue to be guided by our values of honesty, integrity and trust.”