European sales bolster Jamaica Producers
Jamaica Producers Group made a loss on its JP Tropical operations, but a solid 82 per cent spike in pretax earnings from the European division helped to offset the underperforming segments.
Group revenue rose by a billion dollars to $8.8 billion at yearend December 2014, some $6.1 billion of
which was earned by JP Europe. Geographically, the Netherlands, home of fresh juice business Hoogesteger, was the lead generator of revenue at $4.7 billion. Jamaica accounted for $2 billion.
Jamaica Producers said the loss of $108 million in its JP Tropical division resulted from import costs for inputs, challenging farm yields linked to drought conditions, and market conditions that made it difficult for the company to recoup the costs.
Low coffee supplies
Joint-venture company Mavis Bank Coffee Factory was also challenged by low supplies of coffee beans for processing, leading to "exceptionally high" prices for coffee cherries. Supply conditions, which were affected by the leaf rust disease and the weather, were the worse seen in decades, said Jamaica Producers.
Pretax earnings for the group was down by $26 million to $404 million - JP Europe contributed $334 million and JP Corporate $178 million. But profit rose at the bottom line from $252 million to $358 million, due to a reduced tax bill.
year of investment
During the year, Jamaica Producers refreshed its snack portfolio, invested in technology to increase the shelf life of its juices in Europe, acquired full ownership of Dominican Republic-based subsidiary Antillean Foods Inc, a snack manufacturing and distribution business; and increased its stake in port company Kingston Wharves Limited to 42 per cent.
Jamaica Producers said the additional 50 per cent acquisition in Antillean Foods "is expected to improve the resilience of the group's JP Tropical Foods business segment and the stability and diversity of its earnings".
Antillean contributed post-acquisition revenue of $43 million and post-acquisition profit of $2 million to the group's 2014 results.
Mavis Bank contributed losses of $41.7 million to the group, compared to a profit of $4.5 million in 2013.