For the half year ended June 30, 2011 GraceKennedy Limited (GKC) reported a diluted EPS of J$3.68, this represents a 1.1 per cent decline in earnings from the J$3.72 reported in the comparative 2010 period.

In comparison to the first half of 2010, GKC registered a 3.2 per cent increase in its revenues to J$29.0 billion. This growth stemmed particularly from the largest revenue contributing sector, Food Trading. Revenues here gained 9.4 per cent over last year and accounted for 66.3 per cent of the overall Group’s top-line. In its second quarter, GKC would have benefited from strong domestic market performance as sales were boosted because of the Easter period. On the international front, the Group’s UK subsidiary continued to experience growth in its sales. GKC’s Retail and Trading sector revenue also grew, recording a 6.3 per cent year-on-year improvement over 2010.

Expenses for the Jamaican conglomerate was 4.5 per cent higher than the J$26.4 billion registered in the first half of 2010. Overall, the Group’s Profits from Operations were down 8.2 per cent to J$1.9 billion. The fall here would have been mitigated to some extent by the 24.1 per cent year-on-year increase in Other income. GKC’s operating profit margin declined marginally from 7.5 per cent in HY 2010 to 6.7 per cent in HY 2011. Interest Income fell 11.9 per cent to J$175.5 million, while Interest Expenses declined 22 per cent year-on-year.

GKC’s Profit before tax was down 4.2 per cent for the year from J$2.0B to J$1.9B. The conglomerate would have benefited from gains in pre-tax profits in its Food and Trading Retail and Trading and Money Services sectors while for the Banking and Investment and Insurance sectors declines of 14.6 per cent and 4.9 per cent respectively were reported for the half year. However, on a quarter-on quarter basis these two sectors saw improvements when compared to the first quarter. The Insurance sector in Q1 would have experienced a decline in profits due to the reduction in investment income caused by the Jamaican Debt Exchange (JDX). For instance, in the Insurance segment pre-tax profits in Q1 2011 was J$49.1 million while in Q2 2011 it was J$143.3 million. Despite being negatively affected by the JDX, the recovery strategies implemented by GKC for Jamaica International Insurance Company Limited have resulted in improved underwriting performance which would have been reflected in its commendable Q2 performance.

The company continues to seek ways of improving efficiency and effectiveness and increasing revenue and growth. Some of the initiatives include its continued pursuit of innovative technologies and modernisation of factories to meet regulatory standards. This is key given the growing emphasis and regulations on food and safety in some of its markets including the US and Europe. The company in its 2010 Annual report also stated that it was increasing market share and presence in existing markets in the UK and US through the introduction of new products. The company for this year has sought to extend supply as they explore opportunities in Latin America, Eastern Europe and South East Asia. In fact, Grace Foods International has its foot in new territory with its first shipment being made to Mexico. The Group must also be commended for the improvement in the performance in the Insurance sector’s performance between the first and second quarter. The strategies implemented here, once continued should contribute positively to the insurance sector in the second half of the year.