Q3 profit rises 33% at Grace Kennedy

Grace Kennedy continues to enjoy a phenomenal year, with profit attributed to the company’s shareholders, rising 33 percent to $1.68 billion for the September quarter, from $1.26 billion for the 2019 third quarter and 35 percent for the nine months to September to $4.4 billion from $3.27 billion the corresponding period in 2019.

Don Wehby CEO of Grace

Taxation more than doubled in both periods, but profit before tax grew 49 percent in the third quarter to $2.8 billion and 51.5 percent to $7.3 billion for the nine-months.
Total comprehensive income increased by 5 percent for the three-month period to $2.2 billion but dropped by 37 percent for the nine months to September, from $9.2 billion to $5.8 billion.
The group had one of the best years for growth in revenues so far, with a rise of 16 percent for the quarter to $29.6 billion, from $25.5 billion in 2019 and up 12 percent $86 billion from $77 billion for the nine months. The previous best revenue performance was back in 2009 with a full-year increase of 19.7 percent and then 2015, with an increase of 12.6 percent, thereafter growth declined annually to 2019. Revenues grew 10.7 percent in 2016, 5.5 percent in 2017, 4.8 percent in 2018 and just 5.7 percent in 2019. According to the Managing Director Don Wehby, “the strong growth in revenues was fueled by the food division and particular international food business.”
Contributing to the 2020 growth is added revenue brought in with the acquisition of the majority shares in Key Insurance helping to drive revenue for the Insurance segment by 28 percent over 2019 to garner $7.7 billion. Food and trading segment continues to account for the lion’s share of the revenue tallying $68 billion for the nine months period, an 11 percent increase over 2019. Revenue for the Banking segment increased just 3 percent to $4.7 billion while Money Transfer grew 12 percent to $6.5 billion.

Grace Kennedy new headquarters in downtown Kingston

Expenses inclusive of net impairment losses increased 16 percent to $27.5 billion for the quarter and 12 percent to $81 billion for the year to date over the corresponding periods. While separating direct cost from the administrative cost in their audited accounts, Grace continues to short change investors by lumping all costs together in their interim reports.
Net Cash generating operations brought in $9.7 billion. Total assets grew by eight percent to $168 billion with growth in investment securities and receivables but a decline in inventories. At the end of September, shareholders’ equity stood at $56.5 billion and borrowings at $25 billion.
Profit for the quarter equates to Earnings per share of $1.69 and $4.47 for the nine months and should exceed $6.50 for the full year. The stock last traded at $58 on the Main Market of the Jamaica Stock Exchange with a PE ratio of 9 times 2020 earnings.

About IC Insider.com