GraceKennedy surpasses $100b revenue target set to mark anniversary Loop Jamaica

The content originally appeared on: Jamaica News Loop News

The GraceKennedy Group has posted revenues of $107.4 billion, an increase of 12.2 per cent or $11.7 billion over the corresponding period in 2021, surpassing the $100 billion target the company previously set to mark its 100th anniversary.

GraceKennedy CEO Don Wehby said the company is “significantly” above that target with three months to spare in its financial year.

GraceKennedy earned 55.3 per cent of its revenue from its Jamaican operations, with 26.6 per cent coming from its North American operations, 11.6 per cent from the UK and Europe and 6.6 per cent from its other Caribbean-based businesses.

Revenues from both the operations inside and external to Jamaica “are growing quite well, however for the first nine months of 2022, Jamaica is growing at a faster rate than our overseas businesses,” Wehby told a recent investor briefing.

Operating profit across the business segments was mixed, with overall profit before other income of $5.3 billion, a $550 million or 9.4 per cent decline compared to the prior year.

Profit before tax stood at $7.7 billion, 9.4 per cent or $803 million lower than the corresponding 2021 with net profit after tax closing the review period at $5.6 billion, a $586 million or 9.4 per cent decline.

“Our profits from outside of Jamaica has actually increased as a percentage of the pie from 45 to 47 per cent, and inside Jamaica has gone down slightly but both are showing good performances,” Wehby said.

Net profit attributable to stockholders also declined, closing the nine months at $5.2 billion, $458 million or 8.1 per cent or lower than the similar period of 2021.

Earnings per stock unit for the period was $5.27.

Noting the “significant headwinds” of the financial times, Wehby said the company expects the rising global inflation to continue impacting the GKG’s operations but that the company is focused on finishing the year on a high.

Speaking to the impact of global inflation on its business lines, the GK boss said the company’s remittance business had felt the passthrough impact of the 8.2 per cent inflation rate in the US, the UK’s 10.1 per cent and Canada’s at 6.9 per cent on the disposable income of diaspora members in those regions.

“One would think the rising inflation would more affect our food business, but I can tell you the more significant impact of the global inflation has been on our remittance business,” Wehby said noting the two per cent year-over-year or US$50 million decline in remittances to Jamaica.

GraceKennedy Money Services Limited (GKMS) reported a decline in revenues and profit before tax, “primarily attributed to lower transaction volumes and reduced foreign exchange gains,” the company noted in its financial statement of the reporting period.

Speaking on the performance of its Hi-Lo location that opened in Negril in October, Wehby said the location is “significantly better” than anticipated.

“With the upcoming tourist season, we expect it to break all records that we have out in place,” he said noting, GKG continues to look at opportunities to expand its retail network.

Its Majesty Joint Venture in Florida also now sees the company’s patties being sold in Trader Joe’s, one of the largest retail chains in the United States.

Grace Foods (USA), Inc acquire a 49 per cent equity stake in Majesty Foods LLC Majesty Food in 2018. Majesty Foods is a Florida-based manufacturer of patty and empanada products.

“In fact, an announcement will be made shortly. We have expanded to one of the largest supermarket chains in south Florida where we are going to be producing their patties exclusively under their brand,” Wehby said.

He continued: “There is significant growth left in the patties and empanada business in the USA.”

GKG’s food business recorded overall growth in revenues compared to the corresponding period of 2021.