Jamaica Broiler’s profit rises strongly

Jamaica Broiler’s profit from continuing operation climbed 25 percent to $721 million up from $579 million for the January quarter and rose just 4 percent to $1.55 billion compared to $1.49 billion for the nine months to January.
Sales of table eggs in Haiti, penetrated the market sharply for the group, with market share nearly doubling to 21 percent of the market up from 13 percent in 2015, the company reported in their latest fiscal quarterly, to January this year.
The strong growth in market share, helped profit in the Caribbean division to climb 161 percent from $115 million to $299 million from continuing operations, but profit in the Jamaican operations fell 20 percent to $1.9 billion while the US division recorded flat profits. Importantly, the Jamaican operations recorded an increase of 24 percent in segment results reversing the negative growth experience in the previous quarters. Gross profit margin for the year to date, fell slightly to 25.8 percent from 25.9 percent in 2016 but grew nicely in the January 2017 quarter, to 26.3 percent from 25.6 percent in the prior year. The improved margin enjoyed in the January quarter over the previous two quarters, translates to increased profit before tax of $200 million per year.
Earnings per share ended at 60 cents for the quarter and $1.29 for the nine months and should end up around $1.70 for the full year, from net profit of $2 billion. The 2018 fiscal profit is preliminarily forecasted by IC Insider at $2.
Revenue for the group climbed 12 percent, to $11.7 billion in the latest quarter, from $9.9 billion and $32 billion compared to $28 billion for the nine months to January. Divisionally, revenues to third parties in the Caribbean division climbed 23 percent from $1.15 billion, the Jamaican operations rose 13 percent to $23.4 billion while the US division recorded an increase of 20 percent to $7.5 billion. Broilers produced positive cash flows of $2.4 billion in the nine months, but ended up with just $303 million more at the end of the period after a net inflows of loan proceeds, paying dividends and capital spend, as the group continues to expand.
The stock traded at $15 on Tuesday on the Jamaica Stock Exchange for a PE of 7.5 based on 2018 estimated earnings and is well below the market average of 12.6.