GK re­ports strong per­for­mance in all seg­ments

Jamaica Gleaner - - BUSINESS - Tameka Gor­don Busi­ness Reporter tameka.gor­don@glean­erjm.com

GRACEKENNEDY LIM­ITED re­ported a near 12 per cent in­crease in rev­enues to $59.7 bil­lion for the nine months end­ing Septem­ber.

Net profit also grew to $3.7 bil­lion, rel­a­tive to $2.3 bil­lion of profit re­ported for the cor­re­spond­ing pe­riod last year. The third quar­ter con­trib­uted $998 mil­lion to the bot­tom line.

The gains were at­trib­uted to the im­proved per­for­mance of the var­i­ous sub­sidiaries as well as a non-re­cur­ring gain from the dis­so­lu­tion of some on op­er­at­ing sub­sidiaries, the com­pany said.

“With­out this gain the net profit at­trib­ut­able to stock­hold­ers of the com­pany would have in­creased by 40.9 per cent or $836.2 mil­lion re­flect­ing strong op­er­at­ing per­for­mance in our food trad­ing, money ser­vices and In­sur­ance seg­ments,” the com­pany said in its re­port to share­hold­ers.

The food-trad­ing seg­ment showed growth in both rev­enue and profit when com­pared to the cor­re­spond­ing pe­riod of 2015. The seg­ment closed the pe­riod with $52.4 bil­lion in rev­enues and op­er­at­ing re­sults of $1.2 bil­lion over the $47.3 bil­lion in rev­enues and $754 mil­lion in op­er­at­ing re­sults for the com­par­a­tive pe­riod.

GraceKennedy Foods (USA) LLC had sev­eral suc­cesses, the com­pany said, in­clud­ing new prod­uct list­ings and in­creased dis­play space for both Grace Foods and it La Fe Foods, in Wal-Mart. The US-based sub­sidiary also started ship­ping prod­ucts to Puerto Rico “in keep­ing with strate­gic goal for mar­ket expansion”, the com­pany said.

In­creased sales of Grace Aloe and other nour­ish­ment bev­er­ages also boosted Grace Foods UK dur­ing the pe­riod.


“The aloe drink now com­petes not only in the eth­nic drink cat­e­gory but has made sig­nif­i­cant strides in the main stream drink busi­ness in the UK and is cur­rently po­si­tioned among the Top 10 UK juice brands,” GK said.

GK will “con­tinue to in­vest heav­ily be­hind these brands in or­der to max­imise the their ca­pa­bil­i­ties in the in­ter­na­tional mar­kets”, even as it mon­i­tors the po­ten­tial im­pli­ca­tions of Bri­tain’s exit from the Euro­pean Union.

The man­u­fac­tur­ing and dis­tri­bu­tion seg­ments also saw growth in both rev­enue and prof­its for the pe­riod.

In other seg­ments, the bank­ing and in­vest­ment and money ser­vices also saw strong growth. Higher in­ter­est in­come from a “grow­ing loan port­fo­lio” drove the per­for­mance of the First Global Bank sub­sidiary de­spite a dip in prof­its.

Rev­enue and profit im­prove­ments grew on the back of the new West­ern Union op­er­a­tion in The Cay­man Is­lands that the com­pany took over last Novem­ber. Rev­enues from the seg­ment grew to $4.2 bil­lion over the $3.7 bil­lion posted in 2015.

The com­pany’s mo­bile money pi­lot is now com­plete with fi­nal sign-off awaited from the cen­tral bank.

Im­proved per­for­mance from the in­sur­ance bro­ker­age firm Al­lied In­sur­ance lifted rev­enues and prof­its for the in­sur­ance seg­ment with rev­enues clos­ing the pe­riod at $4.8 bil­lion over the $4.5 bil­lion posed for the com­par­a­tive pe­riod.

GK’s stock price has risen 57 per cent since the start of the year to Septem­ber 30, bring­ing mar­ket cap­i­tal­i­sa­tion to over $42 bil­lion. Share­hold­ers ap­proved a three-way stock split in Au­gust to boost trad­ing of the shares.

GraceKennedy will pay out a div­i­dend of 42 cents per share – to­talling $418 mil­lion – on De­cem­ber 9.

The GraceKennedy build­ing is par­tially ob­scured by util­ity wires at Har­bour Street in Kingston in this Septem­ber 3, 2016 photo.

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