Jamaica Broilers' cash reserves strengthened amid pandemic
Jamaica Broilers Group is reporting that it has ended the year ended May 2, 2020, with cash and cash equivalents of $5.62 billion, 68 per cent more than the prior year, despite reduced earnings.
This level of cash reserve will likely help the company cushion the impact of the coronavirus (COVID-19) pandemic, which has affected production and consumption.
In notes attached to its audited results for the year ended May 2020, Jamaica Broilers said it is now in a favourable liquidity position with the increase in its cash and short-term deposit balances.
For the year ended May 2020, Jamaica Broilers posted net profits of $1.36 billion, down from $2.37 billion in the year ending May 2019.
The company, however, saw a slight improvement in revenue for the period ending May 2020, recording $55.75 billion, compared to $55.05 billion the previous year.
Meanwhile, administrative and other costs climbed to $9.83 billion, up from $8.95 billion the year before.
Finance costs also increased to $1.1 billion for the year ended May 2020 up from $988 million the year before, while finance income fell from $366.8 million in year-end 2019 to $36.45 million in May 2020.
In June 2020, Jamaica Broilers disclosed that it had seen a 40 per cent drop in chicken sales and an approximate 25 per cent decline in feed sales.
It also said measures taken by various governments to contain the virus had affected economic activity, leading the company to pursue mitigating measures.
“We have taken several measures to monitor and mitigate the effects of the COVID-19 virus… securing the supply of materials that are essential to our production process,” Jamaica Broilers’ directors said.
Overall, the impact on business and results has been an increase in inventory, biological assets and receivables balances, which have resulted in increased provisions, directors said.
Directors anticipate that if the number of infections reduces, and the economies start to reopen, Jamaica Broilers “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 jeopardizing the health of our people.”