Poultry group's earnings hit hard by ethanol
Published:Wednesday | September 8, 2010 | 12:00 AM
Jamaica Broilers Group Limited has started feeling the effects of its depressed ethanol business on sales and its bottom line, which shed more than J$200 million of profit in the first quarter.
Sales for the poultry group fell by close to a billion dollars, net, in the three month period ending July 31.
Ethanol sales were hardest hit, falling from J$1.4 billion in the year-ago period to J$245 million in the current July quarter.
Broilers blamed the "low level of activities in the international markets" for its profit outturn of J$219.3 million or 18 cents per share in the quarter, down 49 per cent from last year's J$430 million or 36 cents per share.
Turnover in the quarter dropped 16 per cent, from J$5.93 billion to J$4.96 billion.
Broilers has renamed two of its three operating segments as Best Dressed Foods Division (BDFD) which incorporates poultry, and HiPro-Ace Division which covers feeds and farm supplies.
All three business segments contributed profit to group operations: BDFD, J$279.15 million; HiPro-Ace, J$225.58 million; ethanol J$29.22 million.
But while profit was up for BDFD and HiPro-Ace, ethanol's dropped to less than a tenth of last year's J$330 million contribution.
The rest of the business grouped under 'other' also made operating profit of J$81 million, Broilers reported, up from J$71 million.
The company remains liquid with J$1.6 billion of working capital, J$767 million of which is held in cash.
Broilers said it freed itself of J$1.2 billion of debt in the quarter, "facilitated by cash flows generated from group operations." Its borrowings now amount to J$3.6 billion, half of which becomes due in the short term.
Broilers is capitalised at J$7 billion, while its net assets amount to J$9.35 billion.