GraceKennedy

As it anticipates a rebound in local and international markets in which it operates, the GraceKennedy Group is positioning itself to take advantage of new business opportunities and innovations.

The Group achieved revenues for the first quarter of 2010 of $14,476.9 million (2009: $14,689.8 million), a decrease of $212.9 million or 1.4%. The Net Profit Attributable to owners of the Company decreased by $130.4 million compared to the corresponding period of 2009, moving from $884.5 million to $754.1 million a decrease of 14.7%. This represents earnings per stock unit of $2.29 (2009: $2.69). The Board of Directors approved an interim dividend to be paid on May 27, 2010 of approximately $165 million, which represents 50 cents per stock unit.

Chairman & CEO of GraceKennedy Limited Mr. Douglas Orane said the Jamaica Debt Exchange (JDX) Programme has had a short-term adverse impact on profitability. However, he noted that the effect on the Group’s Statement of Financial Position was projected to be less than 2% of Equity, and would therefore not materially affect the financial position of the Group.

GK Foods had another challenging quarter with revenues and profits almost in line with the previous year. Noting that the impact of the global recession was still being felt in the Jamaican market and some Caribbean markets, Mr. Orane said, however, that the company’s North American markets were performing above 2009. The Group Chairman reported that, although Grace Foods UK was severely impacted by bad weather conditions in January, that company was showing signs of recovery and expectations were for continued improvement in performance going into the summer months.

During the quarter, GK Foods began moving inventories into the New Distribution Centre in Spanish Town. Both World Brands and Grace Foods International now operate from this facility. “We should complete the transition process in May. Going forward, we expect to see major improvements in operational efficiencies and the opportunities to take on additional business”, Mr. Orane reported.

GK Foods’ new-product development efforts resulted in the launch of a flavoured water branded “Chillin” with Watermelon, Sorrel and Cranberry flavours. These were launched to coincide with the staging of ISSA/GraceKennedy Boys and Girls championship.

The performance of the GraceKennedy Financial Group continued to be impacted by a sluggish economy, reduced revenue streams, and, in the latter part of the first quarter, the effects of the JDX Programme. However, the Money Services segment performed creditably with the continued expansion of the agent network. Despite limited revenue opportunities in the Banking and Investments segment, First Global Bank Limited (FGB) achieved growth in its loan portfolio. The bank also launched its Global Access internet banking service and business and corporate Visa credit cards during the quarter.

In the Insurance Segment, Allied Insurance Brokers Limited (AIB) was the recipient of the Jamaica Chamber of Commerce Best of Chamber Award for medium sized companies. Jamaica International Insurance Company Limited (JIIC) continued to meet customer needs with the introduction of on the spot insurance premium financing in February.

The division enhanced its service offerings in Western Jamaica with the opening of the GraceKennedy Financial Building in March at the Fairview Shopping Centre in Montego Bay. The financial centre houses the operations of FGB, FGFS, JIIC and AIB, offering a wide range of financial services in a single location.

In the suit brought by Paymaster (Jamaica) Limited against GraceKennedy Remittance Services Limited (GKRS) and software developer, Mr. Paul Lowe, judgment was delivered by the Supreme Court on April 30, 2010 in favour of GKRS on all claims made by Paymaster. The Court also ruled in favour of Mr. Lowe in his counterclaim for damages against Paymaster for losses he suffered as a result of Paymaster’s actions. The Court also ordered an enquiry into damages to be paid by Paymaster to GKRS and Mr. Lowe for losses they suffered as a result of the injunction granted on the application of Paymaster in 2000. Costs in the suit were awarded to GKRS and Mr. Lowe to be paid by Paymaster.