GraceKennedy Limited., on Thursday, October 28, announced revenues of JMD$ 222,320.6 million for the first nine months of 2004, representing a 35.3 percent increase on 2003 figures. Profit from operations was JMD$ 1,921.8 million (2003: JMD$ 1,598.6 million) an increase of 20.2%.

Net profit attributable to Stockholders increased by JMD$ 147.8 million over the corresponding period of 2003, moving from JMD$ 1279.7 million to JMD$ 1427.5 million, an increase of11.5%. This represents Earnings per Stock Unit of JMD$ 4.41 (2003: JMD$ 3.96)

The Company’s stock traded at JMD$ 105.05 per stock unit at the end of the third quarter, a 95% increase since the beginning of the year when the stock price was JMD$ 53.95 per unit. As at September 30, market capitalisation stood at JMD$ 34 billion (US$551.6 million).

Despite satisfactory results, several factors have impacted the Company’s 2004 performance. As might have been expected, Hurricane Ivan has had an adverse effect on the group and all indications are that this will continue to affect profitability—in particular factories and export activities—for the rest of the year.

The company’s earlier forecast of 15% profit growth for 2004 has been revised and is likely to be 3 to 5% higher than 2003. This is due to four main factors:

• The impact of Hurricane Ivan
• Further restructuring of the Maritime Division
• The effect of the recently introduced IFRS accounting rules on surpluses/losses from the company’s pension fund
• An anticipated higher tax rate than 2003.

Nevertheless, several divisions continue to maintain steady performance. Satisfactory results were seen in the Food Trading Division, which has launched two new products, Zesti Light (diet) and Grace Tropical Rhythms in a flexible pouch. The division has also commenced trading in Martinique and Guadeloupe using Grace Tropical Rhythms as the entry product.

The Retail and Trading Division achieved a significant increase in profits against the comparative period in 2003. Following the merger, The Hardware & Lumber Group continues to experience strong growth in sales and profits, a trend that is expected to continue.

The Financial Services Division continues to perform extremely well. The mergers within the division were completed on 1 July and the division is seeing the benefits of these synergies from both First Global Bank Limited and First Global Financial Services Limited.

GraceKennedy’s role in the maritime industry is under review and the Maritime Division will be undergoing a major restructuring in the near future.

Grace, Kennedy Information Services Division and Western Union established a special fund known as the “Grace, Kennedy/Western Union Build Back Jamaica Initiative” with an initial commitment of $30 million, to which each company contributed 50%. The fund will assist Jamaicans in need after Hurricane Ivan.

In respect of new business, GraceKennedy Limited. and Guardian Holdings have signed a Memorandum of Understanding for a joint venture company in health insurance. That company’s operation is to begin in the first half of 2005.

EC Global Insurance Company Limited was recently launched in St. Lucia, offering general insurance.

In November 2004, GraceKennedy Limited will be listed on the Eastern Caribbean Stock Exchange.

In his comments that accompanied the results, Mr. Douglas Orane, Chairman and Chief Executive Officer expressed sympathy for the loss of lives across the Caribbean as a result of Hurricane Ivan. Mr. Orane also expressed condolences to the family of Professor Gladstone Mills, a former Chairman of the Grace, Kennedy Foundation.

Posted: October 29, 2004