The Jamaica Broilers Group Limited produced a net profit attributable to shareholders of $1.1 billion, for the quarter ended October 26, 2024, a 14% decrease from the $1.3 billion achieved in the corresponding quarter last year.

Group revenues for the quarter amounted to $23.6 billion, a 1% increase above the $23.4 billion achieved in the corresponding quarter of the previous year. Our gross profit for the quarter was $5.7 billion, a 2% decrease from the corresponding quarter last year.

Jamaica Operations reported a segment result of $3.3 billion which was $394 million or 11% below last year’s segment result. Total revenue for our Jamaica Operations showed a decrease of 1% from the prior year six-month period. The reduction was mainly driven by the impact of the passage of Hurricane Beryl.

Our US Operations reported a segment result of $2.4 billion which was $185 million, 8% above last year’s segment result. This increase was driven
by increased volumes of poultry meat. Total revenue for the US Operations also increased by 8% over the prior year six-month period.
Christopher Levy Group President & CEO

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Scotia Group reports net income of $20.2 billion for the year ended October 31, 2024, representing an increase of $2.9 billion or 17% over the previous year. Net income for the quarter of $6.2 billion reflected an increase of $703.4 million or 13% over the previous quarter. The Group’s asset base grew by $40.3 billion or 6% to $705 billion as at October 2024 and was underpinned by the excellent performance of our loan portfolio.

In furtherance of our objective to continue to return value to our shareholders, the Board of Directors has approved a dividend of 45 cents per stock unit in respect of the fourth quarter, which is payable on January 24, 2025, to stockholders on record as at January 2, 2025.

President and CEO of Scotia Group, Audrey Tugwell Henry commenting on the year’s performance said “I am extremely pleased with our performance for the year. I am very grateful to our clients for decisively choosing Scotia Group to support their financial needs in 2024. Our results are a testament to the effectiveness of the execution of our strategy. The growth across the business reflects the hard work and dedication of our team and our commitment to simplifying our business and offering the best financial solutions in the market.”

Business Performance
Under the leadership of our executive team, each business line made a strong contribution to the overall performance of the Group. Deposits increased by $31.2 billion or 7% to $476.1 billion, signaling our clients’ continued confidence in the strength and safety of the Scotia Group.

Total loans increased by 16.3% year over year. This includes an increase of 13% in our Scotia Plan personal banking loans and an impressive 26% increase in mortgages when compared with the prior year. Our commercial banking unit continues to stand out in the market with our commercial loan portfolio increasing 11% over the previous year. We believe our commercial solutions are the best in the industry and we look forward to continuing to help local businesses to grow and succeed. In Q4, our Commercial Unit hosted a digital payments solutions seminar in conjunction with Mastercard for clients in Montego Bay. The merchant services business is a significant component of our business and will remain a key area of focus next year.

“All our business lines have delivered consistently strong results throughout the fiscal.”

Scotia Insurance reported a significant increase in net insurance business revenue of 40% year over year driven by a combination of favorable factors including higher contractual service margin (CSM) releases from our strong inforce book of business and increases in our premium revenue from creditor life. A 20% increase was also recorded in the number of policies sold when compared to the previous fiscal year.

Our newest subsidiary, Scotia Protect, has been on a continued growth trajectory since launch. Clients are very satisfied with our insurance offerings and particularly our interest-free payment options for insurance premiums. Total revenue for ScotiaProtect increased by 230% year over year and Gross Written Premiums were up 143% year over year.

At Scotia Investments, our investment advisors continue to assist our clients to navigate the market with bespoke financial advice and solutions. Assets Under Management at Scotia Investments increased by 14.4% over prior year evidencing our investor’s confidence.

During the quarter, the Group continued to advance its strategic agenda. In furtherance of our goal to make it easier to do business with us, we were pleased to launch digital onboarding for new bank clients. Clients interested in banking with us can now open a Scotiabank account online in just a few minutes. The digitization of new deposit account opening, will positively impact wait time in branch and will increase the capacity of our branch staff to serve clients more efficiently.

Services at our contact centre were also enhanced allowing clients to conduct more transactions and resolve more issues remotely. This includes transactions for both the bank and the life insurance company.

The Board of Directors of Scotia Group Jamaica Limited at its meeting held December 12, 2024 passed the following resolution:-
“Be it resolved that a final dividend of 45 cents be paid on each stock unit of the paid-up capital stock of the Company to stockholders on record as at the
close of business on January 2, 2025 and that the same be payable on January 24, 2025.

President and CEO of Scotia Group, Audrey Tugwell Henry

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The cinema industry is grappling with an existential crisis. Globally, theatres are losing audiences to the allure of on-demand streaming platforms such as Netflix, Amazon Prime, and Disney+. These platforms, now competing directly with Hollywood studios, offer high-quality films featuring A-list talent, making it harder for traditional cinemas to sustain attendance.

Locally, Jamaica’s Palace Amusement Company exemplifies this struggle, recently reporting a one-third dip in attendance and significant losses. Yet, despite the dire headlines, opportunities for reinvention abound.

The Local Scene: Palace Amusement’s Struggles and Innovations

Palace Amusement faces the dual challenge of a global content drought and shifting viewer habits. The lingering impacts of Hollywood’s Screen Actors Guild and Writers Guild strikes exacerbated the situation, delaying blockbusters and leaving theatres to depend on weaker releases. Hits like Barbie and Mission: Impossible 7 in 2023 were followed by a lackluster 2024 lineup, with films like Joker 2 underperforming globally. As a result, Palace recorded a 33% decline in attendance during the first quarter of 2024, leading to a 20% revenue drop​.

To combat these challenges, Palace has taken steps such as introducing 4DX technology at its flagship Carib 5 cinema. This multi-sensory format—incorporating seat movements, water splashes, and other effects—has proven popular, driving higher occupancy rates for certain screenings. However, such innovations alone are not sufficient.

The Global Shift: Lessons from International Players

Around the world, cinema operators are diversifying their offerings and finding creative ways to fill theatre seats:

Alternative Content: Cinemas in Europe and the United States are increasingly showing live events such as concerts, sports matches, and theatrical performances. For example, AMC Theatres in the U.S. streams live concerts and offers gaming nights, turning theatres into multi-purpose venues.

Premium Experiences: Operators like Cineworld have shifted to offering luxurious seating, gourmet food options, and private screening packages, creating an upscale experience that streaming cannot replicate.

Local Content and Festivals: In countries like India and South Korea, cinemas rely on vibrant local film industries to draw audiences. By promoting Jamaican and Caribbean films through local festivals, Palace could engage regional audiences while reducing dependence on Hollywood.

Subscription Models: Subscription services like AMC Stubs A-List and Regal Unlimited allow audiences to see multiple films for a flat monthly fee, boosting attendance and stabilizing revenues.

Digital Engagement: Many cinemas now use robust loyalty apps, personalized recommendations, and gamification strategies to connect with patrons. Palace could enhance its app to drive engagement, offering discounts, virtual rewards, and early ticket access.
Strategies for Palace Amusement

Given the shifting landscape, Palace Amusement could adopt the following strategies to revitalize its business:

1. Diversify Offerings Beyond Films

Transform cinemas into multi-use entertainment hubs. Hosting live events, comedy shows, and esports tournaments can broaden audience appeal.

2. Expand Local Content Investment

Collaborating with Jamaican and Caribbean filmmakers to produce original content would not only support the local creative economy but also attract culturally invested audiences.

3. Enhance the Viewing Experience

Expand 4DX technology to additional locations while exploring other immersive technologies like VR cinema experiences.

4. Build Community Engagement

Cinemas can serve as cultural spaces, hosting film clubs, Q&A sessions with filmmakers, and themed events tied to movie releases.

5. Adopt Flexible Pricing

Dynamic pricing strategies—lower ticket prices during off-peak hours and premium pricing for blockbusters or special events—can maximize revenue.

6. Strengthen Online Presence

Leveraging social media and digital marketing to highlight new experiences and engage with younger audiences is critical. Integrating streaming partnerships, such as limited online releases of local films, could also diversify revenue streams.

The Path Forward: A Reinvented Cinema Experience

Despite challenges, there is optimism. Palace Amusement anticipates a stronger 2025, with a more robust lineup of films and continued financial stabilization through debt reduction strategies. Globally, the National Association of Theatre Owners projects a rebound for cinemas, particularly with the release of delayed blockbusters​.

To secure its place in a rapidly evolving industry, Palace must embrace innovation, diversify revenue streams, and reimagine the cinema as more than a place to watch films. It must become a hub for experiences that unite communities, celebrate culture, and deliver entertainment that streaming cannot replicate.

In the end, the future of cinemas lies not in resisting change but in embracing it—and leading audiences back to the magic of the big screen.

Introduction: The Decline of the Low-Cost Carrier (LCC) Model
For decades, the low-cost carrier (LCC) business model has been a game-changer in the aviation industry, enabling millions of travelers to fly on a budget and reshaping the way airlines approach cost structure and pricing.

Airlines such as Southwest, Ryanair, and EasyJet built empires by offering no-frills flights at lower fares, often with ancillary services and fees adding to their bottom lines. However, in recent years, many budget airlines have found themselves struggling as the model faces mounting pressure from rising costs, competition, and changing passenger expectations.

As the aviation industry begins to recover from the COVID-19 pandemic, one question arises: Can budget airlines continue to thrive in a post-pandemic world, or should they shift their focus to a more premium customer base? The idea of upgrading service offerings and pursuing more affluent passengers has gained traction among some players in the LCC space. But is this the right move? Will chasing premium customers solve the problems facing the low-cost model?

The Rise and Evolution of Budget Airlines
The origins of the budget airline model date back to the 1970s, with Southwest Airlines often credited as the first low-cost carrier. Founded in 1967 and taking off in the early 1970s, Southwest revolutionized the industry by offering simple point-to-point routes, standardized aircraft, and minimal frills. This made air travel more affordable for a broader segment of the population and set the stage for the global rise of low-cost carriers in the decades to follow.

Ryanair, founded in 1984, is another key player in the LCC space. Under the leadership of Michael O’Leary, Ryanair aggressively slashed costs by charging for extras, eliminating complimentary services, and focusing on the most profitable routes. These strategies enabled Ryanair to offer low base fares while generating significant revenues from additional fees, such as for checked bags, seat reservations, and food.

By the 1990s and 2000s, the LCC model had spread across Europe and North America, with EasyJet and other carriers joining the ranks. By 2000, LCCs represented around 30% of all European flights, and by 2010, low-cost carriers had captured about 40% of the market share in the United States as time progressed, the model started to face challenges, and a growing number of budget airlines began to struggle. What had been an industry-defining strategy was no longer as effective in a landscape marked by high fuel costs, fluctuating consumer demands, and competition from established full-service airlines that had adopted similar low-cost features.

The Struggles of the LCC Model: Rising Costs and Changing Passenger Expectations

Several factors have contributed to the struggles of budget airlines in recent years.

The first and most significant challenge has been rising operational costs. The aviation industry is heavily dependent on fuel prices, and the volatility of global oil prices has made cost forecasting a challenge for budget carriers. While LCCs historically thrived by keeping their operating costs low, recent increases in fuel prices have affected their profitability, especially as they typically do not hedge against these increases as aggressively as larger full-service airlines.

Another challenge for budget airlines is the increasing complexity of the ancillary revenue model. While extra fees for baggage, seat selection, and food have been critical to budget carriers’ profitability, passengers are growing increasingly frustrated with the “a la carte” pricing. As more passengers find themselves nickel-and-dimed for basic services, their loyalty to LCCs is weakening. Many now perceive budget airlines as offering a subpar experience, particularly when it comes to customer service, flight delays, and lack of amenities.

The post-pandemic has also revealed that travelers are willing to pay more for a better experience, particularly in the business and premium travel segments. With business travel rebounding and higher levels of disposable income in some markets, more affluent passengers are seeking out quality services and comfort. In contrast, the budget airline model—which offers limited amenities and often no flexibility—no longer seems as appealing to those looking for convenience and quality in their travel experience.

Will Pursuing Premium Passengers Solve Budget Airlines’ Problems?

As the LCC model struggles, some budget airlines have begun exploring the idea of catering to premium passengers. This shift involves offering a more robust service package, including additional legroom, better in-flight amenities, and flexibility in ticketing—something traditionally associated with full-service airlines. But is this strategy a viable path forward, or will it merely dilute the distinctiveness of the LCC model?

Case Study: JetBlue Airways

One of the most high-profile examples of a budget airline attempting to capture premium passengers is JetBlue Airways. While JetBlue has long been a low-cost carrier, it has gradually transitioned towards offering more premium services. In 2021, JetBlue introduced its “Mint” premium service on select routes, which includes lie-flat seats, gourmet meals, and access to airport lounges.

The introduction of premium service allowed JetBlue to compete with full-service airlines on select routes, particularly transcontinental and international flights. However, despite the success of the Mint service, JetBlue has been careful not to abandon its core low-cost business model. It continues to offer more affordable fare options while gradually adding premium services as an additional revenue stream.

Case Study: Ryanair’s Transformation

Ryanair, traditionally known for its extreme cost-cutting measures and no-frills service, has also made moves towards appealing to a more premium customer base. In 2021, Ryanair launched a premium offering, Ryanair Plus, which includes benefits such as extra legroom, priority boarding, and flexible ticket options. However, Ryanair has been careful to maintain its low-cost core by keeping its basic fares highly competitive.

This dual approach—where LCC’s maintain their low-cost offerings while introducing premium services for a select group of customers—has been viewed as a potential solution to the struggles facing budget airlines. The question remains whether this hybrid approach will be sustainable, especially if passengers expect the same level of service across all routes and price points.

A Comparison with Full-Service Airlines
The traditional model of full-service airlines is based on offering a wide array of services, from lounge access and in-flight entertainment to flexible ticketing and loyalty programs. These airlines have a higher cost structure but also benefit from customer loyalty and premium pricing. Airlines such as American Airlines, British Airways, and Singapore Airlines continue to cater to the premium passenger, with higher ticket prices offset by high levels of service.

For passengers, the experience of flying on a full-service airline is markedly different from that of a budget carrier. Full-service airlines generally provide better customer service, more comfortable seating, higher quality in-flight entertainment, and perks such as airport lounge access for business-class passengers. However, these services come at a premium price. In contrast, budget carriers offer a more utilitarian flying experience but are considerably cheaper for those willing to forgo the luxuries of air travel.

The key question for the future of the LCC model is whether budget airlines can maintain their identity as low-cost carriers while introducing premium offerings that will satisfy a more discerning customer base without alienating their core market of budget-conscious travelers. As airlines seek to strike a balance between these two approaches, the outcome will ultimately depend on the ability to deliver a more flexible, high-quality experience without significantly raising prices.

The Future of the Budget Airline Model
As budget airlines continue to face rising operational costs and shifting passenger expectations, many are considering shifting their focus to attract more premium passengers. Whether this strategy will succeed or dilute the appeal of the traditional low-cost model remains to be seen. However, the growing demand for enhanced services and the increasing willingness of travelers to pay for comfort presents an opportunity for budget carriers to evolve.

The future of the LCC model may lie in finding the right balance between low-cost operations and premium offerings, catering to both price-sensitive and service-oriented travelers. For the time being, the success of this hybrid model will depend on how effectively airlines can leverage technology, streamline operations, and introduce high-quality experiences while maintaining their competitive edge in pricing.

Introduction: The Tension Between the Central Bank and Commercial Banks
Jamaica’s economic recovery in recent years has been closely tied to the monetary policies of the Bank of Jamaica (BOJ), which has used interest rate adjustments as a tool to control inflation, stabilize the currency, and foster economic growth.

However, a key obstacle to the effectiveness of these policies has been the slow transmission of BOJ rate cuts into the lending rates of commercial banks. The pace at which commercial banks lower their interest rates after the BOJ makes its adjustments has been a source of tension, particularly as high borrowing costs have stifled investment and economic activity in critical sectors such as construction, real estate, the stock market, and broader financial services.

The Rate Transmission Challenge
For years, the BOJ has maintained an aggressive stance on controlling inflation, setting the policy rate at elevated levels to curb inflationary pressures and stabilize the exchange rate. The central bank’s decision to raise rates has, however, faced resistance when passed through to consumers. While the BOJ adjusts its policy rate, which is expected to affect market rates and borrowing costs, commercial banks in Jamaica have been slower to adjust their own lending rates. The delayed response from commercial banks in reducing interest rates after the BOJ signals a rate cut has created a disconnect in the economy, frustrating the central bank’s efforts to stimulate investment.

“We are absolutely determined that we have to have a much more efficient transmission system,” Bank Of Jamaica Governor Richard Byles

“Commercial banks have been slow to lower lending rates in response to BOJ adjustments, even as the central bank signals its intention to stimulate growth,” says an economist from the Caribbean Development Bank. “This delay results in a less responsive monetary policy, which weakens the transmission mechanism and hampers economic growth.”

This slow pass-through effect has been especially problematic for businesses and consumers relying on credit to drive spending and investment. High lending rates have made borrowing expensive, discouraging business expansion and large-scale investments, especially in sectors like construction and real estate.

“The group’s financial performance continues to reflect the impact of the ongoing high-interest rate environment in Jamaica, which exerts downward pressure on property values, resulting in lower property income relative to prior year.” Norman Reid Chairman FirstRock Real Estate Investments Limited

The Impact on Key Sectors: Real Estate, Construction, and the Stock Market

1. Real Estate and Construction:

The construction and real estate sectors are particularly sensitive to interest rate movements because of their reliance on financing for property development and home purchases. High interest rates have increased the cost of capital for developers, making it more expensive to finance new projects and slowing down the pace of construction. In addition, potential homebuyers have been discouraged by high mortgage rates, further dampening demand in the housing market.

Jamaican developers and real estate professionals have expressed frustration with the lack of affordability. “With borrowing costs so high, it has become increasingly difficult for developers to undertake large projects or offer affordable housing to the average Jamaican,” said a prominent Jamaican real estate developer in an interview with the Jamaica Observer. “This is not just about the cost of money, it’s also about the ripple effect of slower growth in the construction industry, which impacts employment and related sectors.”

“Owing to higher policy interest rates by the Bank of Jamaica, which moved from a historic low of half a per cent (0.50) since October 2021 to the current 6.5 per cent, FirstRock Real Estate Investments Limited has been realising lower property income as pressure continues to weigh down property values resulting in a softening of the market.”

2. The Stock Market:

In the financial markets, particularly the stock market, high interest rates have made government securities more attractive relative to equities. As a result, the Jamaican stock market has seen a period of subdued investor activity. When interest rates are elevated, investors tend to favor the guaranteed returns of bonds and treasury bills, which are perceived as lower risk compared to stocks.

The Jamaican stock market has experienced a sharp decline in activity, with reduced liquidity and a diminished appetite for riskier investments. Analysts suggest that the high cost of capital has discouraged companies from seeking capital through equity financing, opting instead for less-expensive debt or leaving expansion plans on hold. “The slow transmission of lower rates from the BOJ to consumers means that the real economy and the stock market suffer as investment slows,” says an analyst at JMMB Group.

3. The Financial Sector:

The financial sector has been one of the primary sectors impacted by the BOJ’s rate hikes. Banks’ profitability is closely tied to the interest rate spread—the difference between what they pay for funds and what they charge on loans. As commercial banks face high borrowing costs, their interest rate margins tend to widen, increasing profits in the short term. However, in the long term, the suppressed demand for loans due to high rates can limit business growth opportunities and create a drag on the overall financial ecosystem.

“The banking sector is seeing increased profitability on loan spreads, but that comes at the cost of reduced lending, which is unsustainable in the long term,” says a financial analyst with Scotiabank Jamaica. “Banks need to balance profitability with growth, and high interest rates are squeezing that balance.”

The Likely Effects of Falling Interest Rates on Key Sectors

1. A Revival in Real Estate and Construction:

As the BOJ begins to reduce interest rates in response to easing inflationary pressures, the real estate and construction sectors stand to benefit significantly. Lower rates would reduce the cost of financing for both developers and homebuyers, unlocking pent-up demand in the housing market and spurring new construction projects.

Industry stakeholders are optimistic about the potential revival of the construction and real estate sectors. “The drop in interest rates will likely create a favorable environment for developers and potential homeowners. Projects that were previously on hold due to financing costs can now move forward,” says a director at the Jamaica Chamber of Commerce. With a focus on sustainable and affordable housing, developers expect to see increased interest in residential projects as mortgage rates become more manageable.

2. A Boost for the Stock Market:

In the stock market, lower interest rates tend to make equities more attractive compared to fixed-income securities like government bonds. As borrowing costs decrease and disposable income rises, consumer spending increases, driving demand for goods and services. Companies that are able to capitalize on this surge in demand are likely to see stronger earnings, which can attract investors back into the stock market.

In addition, lower rates would reduce the cost of capital for companies looking to expand, potentially leading to increased IPOs and capital raises on the stock exchange. A recovery in investor confidence could stimulate trading volumes and liquidity on the Jamaica Stock Exchange (JSE), enhancing its attractiveness to both local and international investors.

3. A More Dynamic Financial Sector:

The financial sector stands to benefit from a more balanced interest rate environment. Lower rates would stimulate demand for loans and credit products, providing a boost to lending volumes and enabling banks to diversify their portfolios. Banks would also be able to offer more competitive loan products, which would benefit consumers and businesses alike.

In particular, the reduced cost of capital could lead to increased investment in long-term projects, with businesses likely to take on more debt to fund expansion plans. This shift would help create a more dynamic financial sector, capable of sustaining growth in both the short and long term.

Conclusion: A Delicate Balance

The slow pass-through of BOJ rate changes to commercial banks’ lending rates has created challenges for Jamaica’s economic recovery, especially in key sectors like construction, real estate, and the stock market. However, as interest rates begin to fall, the prospects for these sectors are set to improve. Lower rates will encourage investment, promote lending, and make capital more accessible, providing a much-needed stimulus to the Jamaican economy.

As Jamaica navigates the transition to lower interest rates, the effectiveness of the central bank’s policies will depend on how quickly commercial banks respond to rate changes. A more synchronized approach between the BOJ and commercial banks could unlock significant growth potential, driving Jamaica towards a more dynamic and resilient economy.