GraceKennedy winds up dormant companies, reports billion-dollar profit
Over the first six months of this year, net profit at conglomerate GraceKennedy Limited nearly doubled to $2.7 billion buffered by gains on the liquidation of dormant companies based overseas.
"These gains related to dormant companies with no operations. The gains basically related to revaluation gains," chief financial officer Frank James told Gleaner Business on Tuesday.
Asked to name the entities, James said they were not household names and are mainly unknown.
GraceKennedy previously disclosed the liquidation in its first-quarter results, but the impact was not fully reported. The gain was included in 'other income', which totalled $1.5 billion, up 110 per cent year on year. The conglomerate more than doubled its profit to $1.6 billion in the March quarter, while for the period ending June profit rose more than a third to $1.1 billion.
James said the gains in the first quarter related to the liquidation of the dormant companies; while foreign exchange gains benefited the second quarter.
Without this gain on the liquidation net profit attributable to stockholders of the company would have increased by 57 per cent. Instead, it increased 90 per cent from $1.4 billion to $2.7 billion, the company stated.
"Included in the other income for 2016 is a gain on the disposal of investments of $606.5 million. A significant portion of this amount relates to the non-recurring gain realised on the liquidation of certain non-operating subsidiaries," stated the company in its quarterly report.
During the June quarter, GraceKennedy posted revenues of $21.9 billion, up 10 per cent from $19.9 billion.
Reporting on developments during the quarter, the conglomerate said it tested its mobile money pilot being rolled out under its GK Money Services arm it now awaits regulatory approval to officially launch the product; and the Hi-Lo supermarket chain opened its latest branch in Liguanea, Kingston.