8 months ago
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The merger of two conglomerates resulted in the enlarged Pan Jamaica Group Limited, PJG, earning “record” net profit at $3.7 billion, but the portion that’s attributable to stockholders of the company dipped year-on-year.
The majority of the non-controlling interest is related to port company Kingston Wharves Limited, one of the new assets that was added to Pan Jamaica’s books when it finalised the acquisition of the operating assets of Jamaica Producers Group last April.
The group’s consolidated profit grew 36 per cent above the previous year’s profit, but net profit attributable to shareholders dipped to $2.5 billion from $2.7 billion in 2022.
The results in 2022 benefited from a one-off gain from the sale of Pan Jam’s interest in New Castle Company Limited, and with it its stake in Walkerswood sauces. The sale was a $2.27-billion deal from which Pan Jamaica booked a gain of $1.38 billion. Absent that gain, Pan Jamaica would have seen a rise in profit for shareholders in year 2023.
“The normalised profit of PJG after excluding this gain on sale was up 91 per cent over the prior year,” Pan Jamaica stated.
The conglomerate’s revenue for the year totalled $29 billion, driven by improved trading in the wake of the amalgamation of the operations of JP Global Holdings Limited with those of the group, effective from April 2023. JP Global was the vehicle used to transition the Jamaica Producers assets to Pan Jamaica.
The merger resulted in PJG expanding its operating footprint to several countries through a portfolio of around 70 companies either classified as subsidiaries, associates or joint ventures. The business now operates four segments, namely, property and infrastructure, financial services, speciality foods and global services.
In the meantime, Jamaica Producers Group’s portfolio has downsized from more than 30 companies to five, with its main holding now being associate Pan Jamaica Group.
“We are convinced that the consolidated strength of the two groups now operating as one cohesive entity, will significantly enhance shareholder returns through growth within select major lines of business and a stronger financial platform for business development and acquisition-led growth,” said Chairman Stephen Facey and Vice-Chairman & CEO Jeffrey Hall in a joint statement.
Hall also continues in his role as managing director of Jamaica Producers, which has essentially become an investment holding company.
The new Pan Jamaica Group now holds $141 billion in assets, up from $58 billion in 2022; and has a book value, or shareholder equity, of $76 billion, up from $42.6 billion.
Among the four operating segments, property and infrastructure made operating profit of $1.2 billion, marking a significant increase of 175 per cent, compared to the previous year at $449 million. The segment handles commercial property rentals and management, and is inclusive of the group’s holdings in ROK Hotel Kingston, and Courtyard by Marriott Kingston, Williams Offices, the holder of the regional franchise for Regus, and Capital Infrastructure Group, which engages in the development of regional infrastructure projects.
The financial services division reported a profit of $4.3 billion, up from $2.86 billion in 2022, driven by the performance of Sagicor Group Jamaica in which Pan Jamaica holds one-third interest.
Speciality foods underperformed
The speciality foods division generated $3 million profit, down from $93 million, but was the largest contributor to the revenue of the group at $16 billion.
“The speciality foods has underperformed during the year due primarily to an increase in the amortisation charge on intangible assets, arising from the accounting treatment of the amalgamation, as well as challenges experienced in our agri-business operations in the Caribbean,” Pan Jamaica said in its earnings report.
The range of speciality food and drink products includes fresh juices in Europe, and tropical snacks, fresh fruit, water products and Caribbean spirit-based baked goods in the Caribbean.
The global services division reported a profit of $2.8 billion, which reversed the $4.3-million loss in 2022. That division includes interests in port terminal operations, warehousing and third-party logistics services, led by Kingston Wharves. It also includes freight consolidation and freight forwarding from the United Kingdom and United States, under JP Logistics Solutions; and the Geest line which transports cargo to and from Europe, the Caribbean and South America.
The acquisition of the Jamaica Producers assets was paid for through the issue of new shares in Pan Jamaica. Jamaica Producers is now the single largest holder of shares in Pan Jamaica, with 34.5 per cent interest, followed by the Facey family with 21 per cent through Boswell Investment. Stephen Facey and his wife Wendy hold an additional 2.3 per cent stake.
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