Jamaica Broilers Group Limited experienced a significant decline in net profit, reaching J$1.36 billion, down from J$2.37 billion for the year ended May 2020.
However, Jamaica Broilers saw revenue improve to J$55.75 billion compared to $55.05 billion the year before as at May 2020.
Jamaica Broilers saw a big movement in administrative and other costs which climbed to $9.83 billion, up from $8.95 billion the year before.
Added to this was an increase in finance costs which climbed to $1.1 billion, up from $988 million the year before.
The company also saw a sharp drop in finance income from $366.8 million in year end 2019 to $36.45 million in May 2020.
“At this stage, the impact on our business and results has been an increase in our inventory, biological assets and receivables balances which has resulted in increased provisions.”– Jamaica Broilers
Last month, the company’s senior vice president for finance, Ian Parsard, disclosed that the company had seen a 40 per cent drop in chicken sales and an approximate 20 to 25 per cent decline in feed sales.
Commenting on the impact of the COVID-19 pandemic outbreak, company directors said in comments attached to audited results that measures taken by various governments to contain the virus have affected economic activity.
Directors said the company’s response was to build cash reserves and inventory for production purposes.
“We have taken several measures to monitor and mitigate the effects of the COVID-19 virus, such as safety and health measures for our people (such as social distancing and working from home) and securing the supply of materials that are essential to our production process,” they stated.
They outlined, “At this stage, the impact on our business and results has been an increase in our inventory, biological assets and receivables balances which has resulted in increased provisions.”
Further, company directors said they anticipate that if the number of infections reduce and the economies start to reopen that “we will be able to reduce these balances to normal levels. We will continue to follow the various government policies and advice and, in parallel, we will do our utmost to continue our operations in the best and safest way possible without jeopardising the health of our people.”
It was noted that the company has a favourable liquidity position with an increase in our cash and short-term deposit balance.
Cash and cash equivalents at the end of the year were $5.62 billion compared to $3.33 billion at year end 2019.