Sun | Mar 18, 2018

Jamaica Broilers raises $4.6b, to refinance debt

Published:Friday | February 12, 2016 | 12:00 AM

Poultry conglomerate Jamaica Broilers Group Limited (JBG) raised $4.6 billion from two separate transactions, which will partially refinance the group's debt.

The funds were raised this month via a $2.3-billion bond placement and a syndicated loan of $2.3 billion, JBG said in a market filing to the Jamaica Stock Exchange.

The poultry group's most significant long-term liability relates to its borrowings, which amounted to $2.9 billion up to October 2015, its most recent reporting period. But JBG also has another $3.25 billion of loans due in the short term. Equity in the company stood at $12 billion at the review period.

The cost of servicing its debts amounted to $158 million in the quarter and $341 million over six months ending October. Notwithstanding its debt obligations, Jamaica Broilers' profit soared over the October 2015 second quarter to $405.8 million on $9.2 billion of revenue, or about three times higher profit than the corresponding 2014 period at $98.9 million. Its six-month profit more than tripled from $210 million to $720 million.

The company operates three divisions led by its Jamaica operations, which continues to recover from the challenges of sluggish consumer demand.

"We are recording increased sale volumes in poultry and feed products, consequent on targeted marketing strategies. In addition, we continue to focus on cost containment and improvements in the production processes for poultry and feed," JBG said.

Its US operations continues to perform as expected with segment results amounting to $538 million, while its Haiti Broilers venture increased the production and sale of table eggs to 14 per cent of the market, compared to 12 per cent at the end of the second quarter last year.

"The positive effect of this volume growth has, however, been neutralised by significant increases in operating costs due to the continuing depreciation of the Haitian gourde against the US dollar," the company said.

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