Sep 2008 Financial News

Ethanol exports, higher poultry prices push Jamaica Broilers Q1 profits

Sep 19, 2008

Export of ethanol and higher prices for poultry meat boosted both gross income and helped Jamaica Broilers double its net profit, to $180.91 million, in this year's first quarter, when compared to last year.

But the group's senior vice-president for operations, Christopher Levy, has suggested that robust performance for the quarter to August 2, may not be sustained, given the recent retreat in ethanol price in the United States.
"The ethanol market has been softening for the past two months," Levy told the Financial Gleaner.

Broilers' 60-million gallon-a-year ethanol plant, which came on stream during last year's second quarter, accounted for $2.2 billion in revenues, or 35.4 per cent of the group's $6.2 billion in turnover for the current period. This year's first quarter turnover was 121 per cent higher than last year's when the ethanol plant was not yet in production.

Increases
But Broilers in the statement from Chairman Danny Williams and CEO Robert Levy that accompanied the quarterly accounts, pointed out that there were "increases in poultry and feed revenues" because of prices the company imposed to compensate for hikes in "imported grain and other raw material".

While Broilers was able to carry only about three per cent of its turnover to the bottom line as net profit, its operating profit, before financing costs and taxation, at $333 million, was 150 per cent higher than the corresponding period last year.
But financial costs jumped 78 per cent, to $112 million to cover, according to Williams and Levy, higher US and Jamaican dollar borrowings "to meet increased working capital needs, including ethanol inventories".


Source:
The Jamaica Gleaner
Friday September 19, 2008
susan.gordon@gleanerjm.com
http://www.jamaica-gleaner.com/gleaner/20080919/business/business3.html