JBG’s Net Profit Falls YoY, But the US Segment Grows

• Given an increase in the cost of sales and indirect costs, JBG’s net profit declined by 14.7% to $882.14Mn (EPS: $0.88) for the six months ended October 30, 2021. Cost of sales grew 41.8% YoY, owing to increased input costs, which was partially mitigated by significant growth in the US business. JBG’s bottom line was also adversely impacted by growth in distribution cost (10.9%) and admin & general expenses (20.6%). 
• The falloff in net profit was tempered by an increase in revenues (35.0%). The Jamaica Operations reported a 13.0% decline due to increased grain prices and international shipping costs, which increased production costs, all of which were not passed on to its customers. The US Operations reported a 71.0% increase in the segment results, primarily driven by the increased production and sales of the Best Dressed Chicken line of products. The operations have also seen an increase in the sales of feed and fertile eggs, reflecting the growth in the US economy. 
• The operations in Haiti also showed improved results, with a segment loss of $8.6Mn, down from a prior year loss of $38.7Mn. However, revenues fell by 29%, as Haiti continues to experience economic and political instability, which continues to impact the operations in that country. 
• JBG’s stock price has appreciated by 1.6% since the start of the year and closed Wednesday’s trading session at $29.94 per share. At this price the stock currently trades at a P/E of 24.3x which is above the main market distribution and manufacturing sector average of 15.9x.

 (Source: JBG Financials & NCBCM Research)