GraceKennedy profit down by one-quarter Loop Jamaica

Black Immigrant Daily News

The profit at GraceKennedy Limited (GK) declined by 25 per cent to $1.7 billion in its September 2022 quarter, even though revenue ticked higher.

CEO Don Wehby said that the group continues to operate in an increasingly challenging macroeconomic environment characterised by rising inflation globally, an inconsistent supply chain, increasing interest rates and distribution costs.

“In addition, ongoing global geopolitical tensions and conflicts continue to impact food prices and our supply channels. These challenges have led to margins being compressed,” said Wehby.

He cited high global inflation, the disposable income of remittance customers in the sending markets as factors that impacted its remittance business.

The group focused on its nine-month results, which are down at a lesser amount or 8.1 per cent totalling $5.2 billion.

Wehby said the group recorded “strong top-line growth”, realising revenues of $107.4 billion, an increase of 12.2 per cent or $11.7 billion a year earlier.

Operating profit across the business segments was mixed, with overall profit before other income down 9.4 per cent decline compared to the prior year.

Profit before tax (PBT) was also down 9.4 per cent.

In response, GK said it has redoubled its cost containment efforts and implemented strategies to grow revenues and profits sustainably. Notwithstanding the headwinds, GraceKennedy said it remains cautiously optimistic about the future and expects to end the year with a positive fourth quarter.

The GraceKennedy Financial Group also delivered a mixed performance. GK’s banking and investment segment performed well, while GraceKennedy Money Services reported a decline in revenues and gross profit, primarily due to current trends in Jamaica’s remittance market.

GK’s Insurance segment showed robust revenue growth; however, profits declined marginally due to lower-than-projected returns on investment income and higher-than-anticipated claims costs related to inflation.

“We have implemented initiatives to stimulate growth in remittances, which we are confident will produce a positive outcome. The advancement of our digital transformation agenda is critical in this regard, so I am happy to report that our GK ONE mobile app now offers customers the ability to receive remittances as well as pay bills,” Wehby said.

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