Dr. David Lowe, the general manager of Caribbean Producers Jamaica Limited (CPJ), says the company’s half-year under-performance is linked to a streamlining of operations, which included the winding down of a non-core business unit.
CPJ added US$626,000 more to its revenue, a 1.4 percent improvement to US$46 million at half-year December 2016, but profits suffered a steep drop from US$1.76 million to US$968,000. Contributing to the decline was an unusual US$137,000 tax bill that the company faced in the second quarter, compared to zero tax in prior periods.
Lowe says the sales numbers don’t tell the full story.
“The gain in the top line, although modest, is really a replacement of almost two million dollars of what would have been a recurrent business in the past. Indeed, some of the selling and inventory cost would have been the result of winding down those, too,” Lowe said.
The approximately US$2 million in revenue had to do with the June 2016 divestment of the Sealed Air Diversey Care line of business that sold chemicals, a deal that CPJ said would be disclosed later.The GM said the business case for CPJ’s continued involvement in chemicals was weak since it ran the risk of taking CPJ out into the deep.
CPJ is mainly in the business of wine and food distribution, juice manufacturing and meat processing.
“We closed that out in June, as a business decision, since it was too far removed from our core. The types of cost associated with continuing in that business did not justify continuing in that space,” said Lowe.
“We have actually grown because while the numbers are modest, we have actually done business and got income that was not there before,” he said.
The Jamaica Gleaner