Profit at Jamaica Broilers Group fell 13 percent in the July quarter to $361 million from $413 million in 2018 but IC Insider.com computations point to strong gains in profit for the year ending in April 2020 as revenues rise and costs are contained below inflation.
At the same time, profit attributable to shareholders dropped 8 percent to $368 million from $399 million in 2018 even as gross profit increased slightly over 2018 from $3.18 billion to $3.32 billion as sale revenues rose 9 percent to $13 billion, from $12 billion in the corresponding quarter in 2018.
Cost of sales increased 11 percent for the quarter, to $10 billion from $9 billion in 2018 resulting in gross profit margin in the quarter declining to 25 percent from 26 percent in 2018. Distribution cost rose just 2 percent to $445 million from $436 million in the corresponding quarter in 2018. Operating profit increased by 2 percent to $679 million from $665 million in 2018. Finance income fell sharply by 88 percent to $36 million from $300 million in the corresponding period in 2018.
Jamaica Broilers chicken
Administrative expenses remained flat at $2.3 billion, but Finance cost, declined by 7 percent to $299 million from $324 million in 2018 and corporate taxes fell a sharp 76 percent to $55 million.
The group’s segment results were mixed, with foreign exchange losses and political and economic volatility in Haiti negatively impacting the results. The Jamaica segment produced $8.4 billion in revenues, but just slightly above the $8.24 billion generated in 2018 profit resulting in a 9 percent fall in segment profit of $764 million. Operations in Haiti produced $19 million in profit compared to $60 million in the previous year from a fall in revenues from $595 million down to $530 million. Profit from the US operations climbed by 11 percent to $333 million from $ 300 million in 2018 as revenues climbed to $4.34 billion from $3.3 billion in 2018.
Gross cash flows from brought in $650 million but after a dividend payment in the quarter amounted to $212 million and other long term liabilities of $720 million, cash inflows ended at $316 million and that pushed cash and equivalent to $3.65 billion. At the end of July, shareholders’ equity stood at $15 billion with borrowings at just $7 billion. Current assets ended the period at $22 billion inclusive of receivables of $4 billion and inventories of $7 billion, cash and bank balances of $4 billion and current liabilities of $13 billion.
Earnings per share came out at 35.81 cents for the quarter. IC Insider.com is forecasting $3.50 per share for PE of 10 times the current year’s earnings and earnings of $5 for the 2021 fiscal year.
Trading on the Jamaica Stock Exchange main market ended at a another record close, with JSE All Jamaican Composite Index increasing by 763.78 points in a record closing high of 326,087.70 and the JSE Index gaining 695.89 points to a record closing high of 297,102.76. 
Trading resulted in an average of 190,234 shares valued at $4,596,711, for each security traded, compared to 419,737 shares valued at $15,695,578 on Thursday. The average for the month to date is 1,240,308 shares with a value of $6,425,698 and previously 1,510,327 shares with a value of $7,058,809. In contrast, March closed with an average of 626,526 units with an average value at $20,492,207 for each security traded.
The Main Market of the Jamaica Stock Exchange closed down on Friday, with JSE All Jamaican Composite Index falling 776.18 points to 319,258.66 and the JSE Index declining by 707.19 points to 290,880.73. 
Trading results in an average of 160,083 shares valued at $2,588,605 for each security traded, in contrast to 92,769 shares valued at $1,796,332 on Thursday. The average volume and value for the month to date amounts to 204,802 units valued at $3,183,567 and previously, 207,617 units valued at $3,223,626. In contrast, January closed with average of 349,084 units at an average of $5,801,440 for each security traded.
Shocking 4 years of Cargo Handlers errors
The number of shares issued by publicly listed companies is very important information for investors to know, but investors would not think so when examining interim financial statements in Jamaica and Trinidad and Tobago of some of the companies.
There have been so many occasions one has to search high and low to find it if at all it is reported in the interim numbers. This is such a simple matter and the stock exchanges in the region could cure it easily, by making it one of the items that must be included in quarterly reports. It should be included as a part of the statement of movement in Shareholders’ equity.
Take the matter of segment reporting. Some companies report it quarterly and some only annually. Most correctly report the current period and the comparative previous year’s period. Why can’t the JSE insist on some minimum standards for the benefit of investors so they get information consistently? Limners and Bards is the latest company to provide a quarterly report with no segment results yet they report it in the audited report albeit just one year forcing investors to have to go back to the previous year’s report for the comparison. Seems if that is the approach they should just report the current year’s figures and let investors go back to the previous year’s reports for profit and balance sheet information.
Communication with investors is a subjective matter but there are some simple matters that it just takes some thinking or consulting to get right.
The latest shocking reporting is that of Cargo Handlers that shows the number of shares issued as a part of the statement of shareholders’ equity. The oddity is the company reporting only 37.466 million issued shares since 2018 when it increased to more than 374 million units. The Jamaica Stock Exchange website shows them as having 416.25 million shares issued and the audited accounts show that the change took place in 2018 the numbers moving from 37.485 to 374.653 million shares. One wonders why no one discovered this glaring error when the list of top 10 shareholders show four of them having more shares than what they list as issued. The error goes back to 2018 for all of the quarterly reports.
This is such a glaring error and neither the Stock Exchange, the Financial Services Commission the directors of the company or its accounting staff have found out.
Our reporting standards are not up to scratch and some persons in the financial system love to talk about best practices globally.
The vast majority of listed companies report profit results with direct and indirect costs and gross profit. But others do not. The group shockingly includes GraceKennedy, 138 Student Living, Knutsford Express. It is full time that companies lift the standard of reporting so that investors can get pertinent information to use in their investment decision making. In response to a question put to Don Wehby about the bulking of all cost on the profit statement suggest that they are in compliance with accounting standards, but that is such a lame and shocking excuse from a company of such standing in the country. Seprod produces it, Jamaica Broilers does it and several other listed companies so why not Grace. Are grace directors suggesting that their shareholders are lesser persons than those of other companies? The case of 138 Student Living is shocking when one considers that the Chairman, Ian Parsard is also Group Senior Vice President – Finance & Corporate Planning at Jamaica Broilers.
AMG Packaging is in a class by itself when it comes to poor communication. The company has embarked on a major capital project, but the directors appear to be of the view that minority shareholders are best kept in as much darkness as possible about it. The audited accounts for 2020 are silent on any commitment to the project.
The latest quarterly the only capital spend, is shown as work in progress on the balance sheet in the amount of $57 million, with no comments on the progress, the total commitment and when it is expected to be complete and be in use. Worse there are no comments on its use. It is noted that the purpose has moved from a warehouse to a factory between 2018 and now.
In the 2018 annual report, the Chairman stated that “the Company recently took an option to purchase an adjoining property. If the transaction is completed, the additional space will be used to alleviate some of the space constraints in the existing facility, making operations more efficient.”
In the 2019 annual report “The Company completed the acquisition on the property at 12 Retirement Crescent which will allow us to expand our operations and to better serve our customers.” The company also stated that they “obtained funding from Proven Wealth Limited to assist with the development of 12 Retirement Crescent. The KSAC is in the process of reviewing the architectural drawings for 12 Retirement.”
The 2020 annual report states, “the company plans on utilizing the strong cash and cash equivalents position into developing 12 Retirement Crescent. The pandemic had caused the development of 12 Retirement Crescent to delay from 2020 to 2021. A contractor has been chosen and the building of an additional 11,370 square feet is set to begin in February 2021.”
In the results to February this year, the only comment made about the development is “that the new steel frame warehouse purchased from China arrived and construction commenced. The financial statement shows WIP at $49 million, with a zero balance in the November quarter.”