1 week ago
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GraceKennedy Limited has posted mixed results for the nine months ended September.
While revenues climbed, profits faltered – and Hurricane Melissa has added a new layer of complexity and may further brunt the food and financial services conglomerate performance when the December quarter’s numbers roll in.
Group CEO Frank James said the impact of the Category 5 storm on GK’s operations was still being assessed.
For the nine-month period, GK reported revenues of $133.89 billion, up six per cent over the corresponding period in 2024.
However, profit before tax slipped to $8.94 billion, down from $9.67 billion a year earlier, and the portion of earnings attributable to stockholders fell eight per cent to $6.11 billion. Consequently, earnings per share fell from $6.70 to $6.19.
The third quarter mirrored this trend: revenue improved from $42 billion to $44.87 billion, but net income declined from $2.19 billion to $1.86 billion.
James said on an earnings call on Tuesday that the GraceKennedy Foods division again drove revenue growth, buoyed by strong international performance by the US and UK operations.
Grocery retail chain Hi-Lo Food Stores recorded modest revenue growth but a marginal decline in profit.
The manufacturing operations in Jamaica also achieved solid gains through disciplined cost management, James said.
However, he also reported that GK’s domestic distribution businesses faced headwinds, noting that reduced consumer spending and elevated warehouse and logistics costs tempered profitability.
In the financial services division, James said GK General Insurance continued to shine, aided by new business and regional expansion plans for its ScotiaProtect partnership.
First Global Bank reported strong loan-driven growth, while GK Money Services struggled with reduced revenue and profit amid persistent challenges in remittance markets, despite the roll-out of its GKOne digital wallet in Guyana and plans for Trinidad & Tobago and Cayman Islands later this year.
While not giving exact numbers, James said despite the fall in total revenue, GK Money Services grew its market share.
Beyond the income statement, GK’s cash generation from operations weakened, falling sharply to $5.99 billion, compared to $15.14 billion at September 2024.
The group’s net cash holdings also fell from $26 billion to $17 billion, but Chief Financial Officer Andrew Messado said it resulted from new investment decisions.
“Instead of having the cash idle, we have put it under longer-dated investment securities in order to earn a good return on that until we have other uses for the cash,” Messado explained.
As for the impact of Hurricane Melissa, which battered Jamaica and parts of the Caribbean in late October, James spent considerable time on the earnings call acknowledging the storm’s impact on logistics and supply chains.
Core operations remained intact, but the event tested resilience and could influence Q4 performance, he said. Additionally, he cautioned that global and regional uncertainties persist.
In its earnings report, the company indicated that its operations were impacted by the storm, in varying degrees, in six parishes spanning western and central Jamaica. Its trade and loans receivables were impacted, and the company foresees elevated insurance risk from expected claims for property damage.
“The extent of the impact on the group’s financial position, results and cash flows continues to evolve … and a comprehensive assessment of the hurricane’s impact is currently being conducted,” GK said in an update on post-quarter events.
On Tuesday, James noted further that hurricane-related claims were unlikely to exceed reinsurance cover.
English (US) ·