Home Businessuite Markets Profitability For The Quarter Was Ahead Of Plan, Although Net Profit Decreased By J$452.2 Million Or 28.3% Over Q1 2016.- Wehby
Profitability For The Quarter Was Ahead Of Plan, Although Net Profit Decreased By J$452.2 Million Or 28.3% Over Q1 2016.- Wehby

Profitability For The Quarter Was Ahead Of Plan, Although Net Profit Decreased By J$452.2 Million Or 28.3% Over Q1 2016.- Wehby


The GraceKennedy Group released its First Quarter
2017 results reporting an increase in revenue of $1.6 billion to $23.7 billion. This was
driven by growth in both its Food Trading and Financial segments.

Profitability for the quarter was ahead of plan although net profit for the period rounded
off at J$1.1 billion decreasing by J$452.2 million or 28.3% over Q1 2016. As previously
reported, a non-recurring gain of J$423.5 million was realised on the liquidation of some
non-operating subsidiaries for the corresponding period of 2016. Without this gain, net
profit for the current period would have been marginally lower than the corresponding
period of 2016 by 2.4%.

GraceKennedy’s share price increased by 6.1% for the first three months of the year. On
February 28, 2017, the Board of Directors approved an interim dividend of 30 cents per
stock unit to be paid on May 18, 2017 a 15% increase over last year’s first interim
dividend of 26 cents per stock unit. Shareholders’ equity increased by J$1.8 billion over
the three month period to J$43.9 million resulting in a book value per share of J$44.18 as
at March 31, 2017. Earnings per stock unit for the quarter was J$1.02 versus $1.50 at the
end of Q1 2016.

Revenue grew for the Food Trading segment over Q1 2016 driven by higher sales from
the Jamaican foods distribution, Hi-Lo Food Stores and a healthy performance from our
food businesses from Canada and the USA. However, pre-tax profit was lower than the
corresponding period of 2016 due to lower margins and marketing expenses and costs
associated with the expansion and renovation of the Hi-Lo Food Stores. Additionally, the
depreciation of the pound sterling negatively affected Grace Foods UK’s performance in
Jamaican dollars.

“We had some exciting new developments in both the food and financial segments. In
Foods, we are piloting Tropical Rhythms in the Pollo Tropical Fast Food restaurants in
47 stores along the East Coast of the USA and expanding our listings of Grace and LaFe
products in Walmart, Winn Dixie and Publix outlets across the USA,” said Don Wehby,
Group CEO.

Grace Foods UK negotiated a new contract with Transgourmet, Europe’s second-largest
cash and carry and wholesale supplies store which will expand distribution of Grace
Foods products in the continent. Of note is that, for the first time, a shipment of Grace
Instant Porridges and Sauces was sent to Guatemala, and a trial shipment of Grace
Mackerel was sent to Haiti from Grace Foods’ Latin America and Caribbean office.

The Financial Group showed increases in both revenue and pre-tax profit over the
corresponding period of 2016 due to the performance of the Banking and Investments
and Money Services segments. First Global Bank (FGB) saw growth in both its loan
portfolio and non-interest income while GraceKennedy Money Services (GKMS) saw
increased transaction volumes in the remittance business. The Insurance segment
experienced an increase in revenue and a decline in pre-tax profit compared to the
corresponding period of 2016. Among the new developments is GK Insurance (Eastern
Caribbean) Limited’s receiving approval to operate in St. Vincent and the Grenadines,
Antigua and Barbuda and Grenada.

“The Group is fully engaged in delivering convenience and quality to our customers. A
new FGB location at the renovated Hi-Lo Portmore store will further our integrated retail
strategy, while the roll out of GK MPay and plans for Agent banking will advance our
financial inclusion programme. Our teams are working on innovations which will
continue to improve how we meet the needs of consumers, while putting our businesses
ahead of the curve in preparing for future demands,” Mr Wehby said.BM