First Caribbean Bank

Q3 profit climbs 18% at GraceKennedy

Profit after tax climbed 17.7 percent to $1.77 billion for the September quarter this year, compared to $1.5 billion over the same period in 2022 at GraceKennedy, from a 13.5 percent rise in revenues to $39.55 billion, up from $4.85 billion in 2022. Profit before tax for the third quarter rose 15.7 percent to $2.62 billion from $2.27 billion as Revenues climbed 13.5 percent to $39.56 billion from $34.85 billion.
For the first nine months of the year, revenues rose 9.7 percent to $117.8 billion, over the $107 billion earned for the nine months to September 2022. Profit before tax reached $8.8 billion, up 14 percent from $7.7 billion and net profit after tax attributable to shareholders of the group rose 14.2 percent to $6.4 billion from $5.6 billion.
The profit translates to earnings per share for the third quarter of $1.79 and $6.02 for the nine months, compared to $1.52 and $5.23 in 2022, respectively.
Earnings per share for the full year ending in December should hit the $8 market, with a PE ratio of 9 based on Thursday’s last traded price of $71.50.
“GK’s food business demonstrated b performance, with notable growth in revenue and profitability for the period. GraceKennedy Financial Group also delivered a positive performance, driven by b top-line growth” Gordon Shirley, chairman and Don Wehby, Chief Executive Officer stated in their commentary on the results.
The company will pay a dividend of 65 cents per stock unit on December 15 totalling approximately $643 million. This is the fourth and final dividend payment by GK for 2023, bringing GK’s year-to-date total dividend payout to $2.15 billion.

Group Chief Executive Officer, Don Wehby.

Direct and operating expenses rose from $33.2 billion in the September 2022 quarter to $37.57 billion, for the year to date it moved from $101.93 billion to $111.7 billion. The group incurred impairment loss on financial assets in the quarter of $100 million compared to $96 million in the previous year and for the year to date, $233 million versus $230 million in 2022. Other income delivered $856 million to profit in the third quarter up from $752 million in 2022 for the similar period, and for the year to date $2.76 billion versus $2.36 billion in the prior year.
Interest income from non-financial services amounted to $161 million in the September quarter down slightly from $169 million in the 2022 third quarter and for the year to date $474 million up from $424 million for the nine months to September 2022. Interest expense rose to $415 million in the latest quarter from $276 million in 2022 and for the nine months, $1.2 billion up from $919 million in 2022. Associated companies contributed $115 million in the September quarter, virtually flat with $114 million in the previous year and $638 million in September 2023 versus $539 million last year.
The group’s lending activity saw loans advanced to customers rising 12.6 percent to $40 billion at the end of September this year while investment securities climbed to $51.6 billion from $36.96 billion at the end of September 2022. Receivables climbed quite sharply by 35 percent from $19.5 billion at the end of September 2022 to $26.3 billion well ahead of the increase in revenues. On the liability side, deposits grew 23 percent to $61 billion from $49.6 billion at the end of September 2022. Loans received by the group amounted to $30.4 billion a slight increase from the $29.5 million at the end of September 2022. Shareholders’ equity ended the period at $77.8 billion, up from $69.7 billion at the end of September 2022.
In commenting on the results, Gordon Shirley Chairman and Don Wehby in a jointly signed report stated “GK food business demonstrated b performance in the first nine months of 2023 with notable growth in both revenues and pretax profit. Our Jamaican food division achieved commendable results.”

Grace Kennedy products

“The manufacturing business also delivered improved results over the previous year. Hilo Food Stores continue to display robust performance in 2023 powered by increased sales. Our international food business experience improved performance in comparison to the same period last year. But growth in revenue and profitability was achieved by GK Foods USA and Grace Foods UK, while Belize and Grace LACA also saw growth. Our La Fe and Grace brands experienced significant growth in the US market, Grace Foods Canada continues to work at overcoming operational challenges and inflationary pressures in that market.”
“The Financial Group delivered positive performance driven by b top line growth. Our insurance segment sustained growth throughout the period.”
First Global Bank delivered improved results over the prior year aided by increased lending. Remittance services suffered a slight dip in revenues and profit and is partnering with Courts to locate the Western Union outlets in their stores. Bill Express also experienced growth in the period.
Based on the above PE ratio that is much lower than the market average of 13 the stock is undervalued measured by net book value that is the price is less than two times book which is low, with several of its peer trading at a much higher valuation based on net book value. Grace’s main problem is that it is a very liquid stock as there is no dominant shareholder controlling a near majority

Jamaican dollar makes more gains

NCB had the highest net sale of US$ on Friday

The rate of exchange for the United States and Jamaican dollar inched further in favour of the local currency on Friday as dealers sold US$42.2 million at an average rate of $127.99 on Friday, down from an average of 128.126 with the sale of $67 million on Thursday.
On Friday, dealers bought US$37.38 million at an average of $126.74, a decline from $127.38 with the buying of US$61 million on Thursday.
Dealers bought $45,56 million in all currencies on Friday and sold US$50.28 million compared to purchases of US$77.6 million and sale of US$82.5 million on Thursday. Thursday’s trading includes the buying of Can$19.7 million and sale of Can$19.4 million.
Major net sellers of US dollars on Thursday are, Citibank with the purchase of US$160,000 and sale of US$1.65 million, First Global Bank buying US$271,000 and selling US$1.96 million. JMMB Bank ended with the buying of US$839,000 and selling $3.6 million, JN Bank purchased $868,000 and sold $2.48 million, Victoria Mutual Building Society bought $720,000 and sold of $2.45 million but First Caribbean purchased $5.6 million and sold just $1.38 million.
On Friday, Bank of Nova Scotia purchased $9.2 million and sold just $5 million, First Caribbean Bank bought US$813,000 and sold US$1.3 million, JMMB Bank ended buying US$1.87 million and sold $4.8 million, JN Bank purchased $1.16 million with sales of $1.87 million. National Commercial bought US$3.56 million and sold $8.5 million, Sagicor Bank bought $852,000 while selling US$1.99, Victoria Mutual Building Society purchased $693,000 and sold $1.3 million but Citibank purchased US$1.7 million and sold just US$587,000.