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Financial News

May 2009 Financial News

GraceKennedy reports first quarter profits up 39%

May 18, 2009

GraceKennedy Limited has reported strong first quarter results for the period ending March 31, 2009. Profits and revenues were up when compared with the corresponding period in 2008, with the only declines reported in its hardware business.

The Group achieved Revenues for the period of J$14.6 billion (2008: $13.7 billion), an increase of J$910.4 million or almost seven per cent. The Net Profit Attributable to owners of the Company increased by J$247.8 million over the corresponding period of 2008, moving from $636.7 million to $884.5 million, an increase of 39 per cent. This represents earnings per stock unit of $2.69 (2008: $1.95). Shareholders will receive an interim dividend payment of approximately $165 million, which represents 50 cents per stock unit. This will be paid on May 26, 2009.

In the GK Foods division, pre-tax profits exceeded those of the previous year by over 40 per cent, and revenues were also above the similar period in 2008. The company credits the division's improved profit position to its ability to operate more efficiently, with a lower cost structure.

In his statement accompanying the financials, Chairman & CEO Douglas Orane said the division had performed well, despite reduced demand from consumers who have been negatively impacted by the economic downturn. He said the division's strategy would be to "hold our position in the various markets and launch a number of new products during the year".

For the first quarter, Grace Foods launched the Grace Quick Cook porridges and Grace Blends, a range of sorrel-based beverages made from Jamaican sorrel.

GK Investments recorded generally good results for the period January to March 2009. For this division, which includes all of the Group's non-food companies, revenues were 10 per cent above the prior year and pre-tax profits exceeded the 2008 period by over 20 per cent, driven by strong results from the Money Services and Insurance segments and a creditable performance by the Banking & Investments segment.

In February, First Global Bank Limited finalised agreements with the International Finance Corporation, a member of the World Bank Group, for a US$10 million loan and a US$10 million injection for preference shares equivalent to a 20 per cent equity holding. This new relationship has strengthened the Bank's balance sheet allowing it to expand more rapidly, and to be more robust in charting its way through the current global crisis.

The Retail segment experienced a decline as Hardware & Lumber continues to be faced with a contraction in the construction industry. That company, Grace said, is implementing various initiatives to improve efficiencies and reduce costs in order to reverse the decline.

Sunday, May 17, 2009