JP makes new hire to drive food sales - Warns Sandy will dampen 4Q results
Jamaica Producers Group (JP), the shipping and food conglomerate, made a profit of J$17 million in its September quarter, or eightfold year earlier levels.
The gain came from its share in associated companies and joint ventures at J$71.9 million, and not its core operations which made a loss of J$62.7 million, according to just-released financials.
The group, meantime, has made a new appointment: UK national Paul Bates has been hired as chief operating officer for its food unit as part of its effort to drive sales in both its JP Europe and JP Tropical segments.
"We have done a number of acquisitions to diversify the food business and now we are focusing on growing these businesses," said Jeffrey Hall, JP group managing director, in a quick interview with The Gleaner about Bates' appointment.
50 per cent shares
JP in its financial year acquired 50 per cent shareholding in coffee giant Mavis Bank Coffee Factory and a controlling interest in Tortuga rum cake. It also acquired an interest in Kingston Wharves, spending J$1.8 billion to acquire new shares.
But JP's Chairman Charlie Johnston, in his note accompanying financials, warned investors to expect heightened costs in the December quarter arising from Hurricane Sandy. The storm made a direct hit on JP farms on October 24 and destroyed approximately 90 per cent of its crop, management said.
"In 2012, however, the fourth- quarter result will be adversely affected by the impact of Hurricane Sandy on our Jamaican banana business," he said. "We have taken the decision to resuscitate the farms and to investigate other production locations in Jamaica. In order to maintain our market position during this period, we have organised to substitute our production of tropical snacks in Jamaica, with comparable snacks produced at our facility in the Dominican Republic."
In addition, JP expects increased sales of fresh high-quality pineapples to partially offset the significant reduction of banana sales in the next seven months.
"Unfortunately, the combined contribution of these two initiatives will not be sufficient to cover the immediate cost of re-establishing the farm and covering its overheads during the period in which it is out of production," Johnston added.
Revenues for the third quarter were J$1.49 billion compared with J$1.42 billion for the comparable period last year.
Nine-month revenue rose from J$4.5 billion to J$4.98 billion. Profit in the period amounted to J$135 million, significantly lower than the J$1.2 billion in the same period last year. Then, however, the company's bottom line was fattened by a one-off gain of J$1.09 billion from liquidated investments.
JP Tropical Division comprises businesses that are centred in the Caribbean and Central America, which include production and marketing of natural food and drink as well as management of land holdings, while its corporate division comprises interest and investment income.