Aug 2011 Financial News

GK profit marginally down in first half of 2011

Aug 03, 2011

GRACEKENNEDY Limited's net profit declined marginally for the six months to June 30, 2011 when compared to year-earlier levels, even though revenues climbed by 3.2 per cent.

The company posted net profit of $1.22 billion for the six-month period, which was 1.2 per cent lower than earnings for the comparative period in 2010.

Revenues rose year on year from $28.06 billion to $28.96 billion.

Three of the five business segments of the conglomerate saw improvement in pre-tax profit during the review period, while banking and investment, under which GK operates its First Global services, and insurance, which oversees the operations of Jamaica International Insurance Company (JIIC), saw declines.

"GK Food division had encouraging results for the second quarter, as both sales and profits surpassed the 2010 corresponding period," said the report to shareholders, which was co-signed by executive chairman Douglas Orane and CEO, Don Wehby. "This performance was even more creditable in the face of increased expenses including fuel, electricity and raw material costs. The division however, continues to pursue cost-mitigating measures including energy conservation and productivity improvements."

GraceKennedy also saw improvement in sales in the international market and even entered a new territory — Mexico.

"The sale and distribution of the Grace brand in new markets is an area of focus, as we explore opportunities in Latin America, Eastern Europe and South East Asia," said the report accompanying the financial statements.

The rise in remittance volumes helped GraceKennedy Remittance maintain its market share, and even though one of its subsidiaries operating under its retail and trading business segment — Hardware and Lumber — reported a loss for the review period, albeit smaller than year-earlier levels, that business segment improved its profitability.

Pre-tax profit for retail and trading increased from $20.8 million during the six months to June 30, 2010 to $38.5 million during the review period.

GK's banking and investment business segment saw its pre-tax profit fall from year-earlier levels of $538.4 million to $459.7 million, while its insurance arm saw profit before tax fall from $202.4 million to $192.5 million.

"Although (JIIC) was negatively affected by the Jamaica Debt Exchange Programme, the recovery strategies are now in place resulting in improved underwriting performance," added the report.


Source:
Jamaica Observer
Wednesday August 3, 2011

http://www.jamaicaobserver.com/business/GK-profit-marginally-down-in-first-half-of-2011_9363264#ixzz1TybeTXmF