Mon | May 29, 2023

JP makes gains on $1b pandemic investments

Published:Thursday | April 14, 2022 | 12:08 AM
Jeffrey Hall, managing director of Jamaica Producers Group Limited.
Jeffrey Hall, managing director of Jamaica Producers Group Limited.

Food and logistics company Jamaica Producers Group, JP, has pumped nearly $1 billion into investments since the COVID-19 pandemic, with healthy returns to show for it already, its 2021 audited financials show.

These investments have generated a return of nearly 30 per cent based on after-tax profit, but as high as 40 per cent when total comprehensive income is considered.

The bulk of the investment windfall came from the shipping line, which would have benefited from high shipping rates sparked by supply chain shortages and bottlenecks.

“The market for shipping and logistics services was strong for us in 2021. This was true for both rates and volumes,” JP Group Managing Director Jeffrey Hall said via email.

The results have whetted JP’s investment appetite going forward.

“We are pleased with the returns on our investments in this sector and the effectiveness of our team in executing the strategy. We plan to continue to invest in the space in 2022,” Hall said.

JP’s acquisitions during the pandemic included 50 per cent of Geest shipping line, which services Caribbean routes from the United Kingdom; Grupo Alaska, a ice and bottled water company based in the Dominican Republic that was jointly acquired with Norbrook Equity Partners; and a 50 per cent stake in fresh juice manufacturer CoBeverage Lab in Spain. The carrying value of the investment totalled $970 million, and JP’s share of profits from associates and joint ventures was $256.3 million for the year.

The deals were struck between April and October 2021.

Geest, a 65-year-old company, operates five shipping vessels and transports all types of cargo. It conducts scheduled cargo shipping routes to Antigua, Barbados, Curaçao, Dominica, Dominican Republic, Grenada, St Kitts, St Lucia, St Vincent and the UK.

Grupo Alaska reportedly makes and sells Hielo Alaska and Hielo Crystal-branded ice in the Dominican Republic through a network comprising two factories and 7,000 merchandisers. The company also sells water under the Alaska and Pura brands, and packages water for various third-party customers, including Marriott hotels and the Bon chain of ice cream stores. JP wants to transform the ice and water company into a food and drink business.

JP made a modest gain in profit, which rose from $3.7 billion to $3.8 billion, or $1.64 per share. Revenue rose from $21 billion to $25 billion.

The company’s stock, at $23.07 per share, is up 4.46 per cent year to date, valuing JP at $26 billion.