Date: March 6, 2020

For the nine months ended January 31 ,2020, Jamaica Broilers Group (JBG) reported total revenues of $40.58 billion, a 1% increase on the $40.27 billion reported in 2019. Revenue for the third quarter closed at $14.31 billion (2019: $14.55 billion). Total revenue for the nine months is broken down as follows. Of total revenues:

• • The Jamaica Operations contributed $26.14 billion (2019: $26.59 billion).

• • US Operations recorded revenue of $13.06 billion (2019: $11.92 billion), “driven by our recent acquisitions of a feed mill in Georgia and a processing plant in South Carolina, which have now been rebranded Best Dressed Chicken.”

• • Haiti Operating declined year over year to $1.38 billion (2019: $1.76 billion). The decline according to JBG was due to, “the current decline in performance is as a direct result of the political and economic instability being experienced in Haiti.”

Cost of Sales grew by 1% to $30.63 billion from $30.46 billion in 2019. As such, gross profit for the nine months reflected an increase of 1% to close at $9.94 billion versus $9.80 billion booked for the corresponding period in 2019. Gross profit for the quarter amounted to $3.45 billion relative to $3.59 billion for the corresponding quarter in 2019.

Other income fell 40% from $304.26 million in 2019 to $183.72 million in 2020. Distribution costs decreased by 7% to close at $1.31 billion relative to $1.42 billion recorded for the prior year’s comparable period, while administration and other expenses increase marginally by 2% to $6.61 billion (2019: $6.48 billion).

 

Operating profit for the period thus decreased by 1%, totalling $2.20 billion relative to $2.22 billion for the nine months ended January 2019. JBG noted, “Despite the adverse variances experienced on foreign exchange movements of $226 million and Haiti Broilers, the Group’s operations produced a noteworthy operating profit of $2.2 billion.” As for the third quarter, operating profit decreased by 9% from $988.30 million in 2019 to  $897.17 million.

JBG reported a nine months finance income of $36.46 million (2019: $328.41 million), a decline of 89% year over year. According to JBG, “Finance income for the Group, showed a reduction of $291 million compared to last year resulting from reduced foreign exchange gains and reduction in interest income from the WIP loan, which was sold during the first quarter of this financial year.” Finance costs for the nine months amounted to $758.06 million relative to $728.59 million reported in 2019.

Profit before taxation for the period decreased to $1.48 billion  (2019: $1.82 billion). Profit before tax for the quarter closed at $657.26 million in contrast to $858.09 million. Tax charges for the nine months totalled $343.23 million (2019: $408.24 million). As such, net profit amounted to amounted to $1.14 billion, a 19% decreased compared to the $1.41 billion booked for the same period in 2019. Net profit for the quarter amounted to $470.71 million versus $762.87 million in 2019.

Net profit attributable to shareholders amounted to $1.19 billion relative to $1.38 billion booked for the comparable period in 2019. Net profit attributable to shareholders for the third quarter closed at $499.96 million (2019: $754.56 million).

Total comprehensive income for the period amounted to $1.49 billion relative to $1.52 billion recorded in 2019.

Consequently, earnings per share totalled $0.42 relative to $0.63 booked for the third quarter of 2019, while for the nine months ended January 2020, the EPS amounted to $0.99 (2019: $1.15). The trailing earnings per share amounted to $1.81. The total shares used in our calculation amounted to 1,199,276,400 units. Notably, JBG closed the trading period on March 06,2020 at a price of $29.00.

 

Balance sheet at a glance:-

Total assets amounted to $39.92 billion as at January 31, 2020 relative to $33.32 billion a year prior. The increase in total assets was due mainly an increase in ‘Property, Plant and Equipment’ and ‘Inventories’ which rose 28% and 32% respectively. ‘Property, Plant and Equipment’ and ‘Inventories’ as at January 31 2020 amounted to $12.62 billion (2019: $9.82 billion) and $8.30 billion (2019: $6.26 billion) respectively. ‘Biological Assets’ also aided the movement in the asset base with a 26% increase year over year to close at $7.34 billion (2019: $5.85 billion).

Shareholders equity as at January 31, 2020 amounted to $16.06 billion (2019: $13.69 billion), with a book value per share of $13.39 (2018: $11.41).

 

Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.

Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.