GK bullish on market recovery
Published:Wednesday | November 17, 2010 | 12:00 AM
GraceKennedy Limited posted net profits of J$1.5 billion for the nine months ended September, a 15 per cent drop compared to the corresponding period last year, which company executives say is due to the general decline in consumer purchasing power and reduction in interest rates.
The company made J$4.70 per share, compared to J$5.53 per share in the nine-month period for 2009.
GraceKennedy also reported lower turnover of J$41.5 billion, down four per cent.
The company, whose businesses and distribution markets span the Caribbean, United Kingdom and North America, is optimistic that economic conditions will change and that demand will spike in the coming periods.
"We expect the market will turn and growth to recommence and so we are positioning ourselves to take advantage of that opportunity," said chairman and chief executive officer Douglas Orane.
The conglomerate has declared a dividend of 45 cents per share - for a total payout of J$149.15 million based on the third-quarter results.
The food-trading division, which contributes the majority of group revenue, brought in J$25.9 billion, compared to J$26 billion last year, but with the consolidation of its distribution network to create more efficiencies, GraceKennedy says the segment is expected to see some improvements in the coming quarters.
Performance was mixed in different regions.
"Grace Foods UK's performance improved when compared with the corresponding period last year, but still below our expectations due to the recessionary conditions in that market," stated GraceKennedy.
Third-quarter declines
"The rest of the international markets, although growing in the first six months of the year, showed declines in the third quarter in the central and northern Caribbean."
The launch of its milk-base meal supplement, Grace Nourishment, the company said gave the southern region of Trinidad, Barbados and Guyana a boost, resulting in a better performance than its other counterparts.
Business in North America was said to have expanded, particularly in Canada.
"We are operating in a challenging environment but continually looking at opportunities to innovate," remarked Don Wehby, group chief operating officer.
"We have invested in physical infrastructure approximately US$31 million in a new distribution centre, and already we are seeing the benefit and expect to see increasing efficiency," he said.