• For FY2024, GraceKennedy Limited (GK) reported net profit of $8.86Bn, a 5.8% increase over the prior year. GK’s performance reflects solid revenue growth, moderated by rising direct & operating expenses and finance costs.
• Revenues totalled $167.04Bn, representing a 7.8% increase over FY2023. This was largely driven by $131.68Bn from its Food segment (+7.3%), which benefitted from higher volumes and price adjustments. Expansion in its Insurance ($17.49Bn; +13.4%) and Banking & Investments ($11.00Bn; +14.4%) segments also supported revenue growth. However, Money Services declined by 2.5% to $8.62Bn reflecting increased competition in the sector and weaker remittance inflows into the economy.
• Regionally, Jamaica remained GK’s largest revenue generator with $96.72Bn, amid robust domestic demand, followed by the United States and Canada, contributing $21.63Bn and J$8.37Bn, respectively.
• Fueled by higher staff costs, reflecting salary adjustments and inflationary pressures, Direct and operating expenses rose by 7.7% to J$159.06Bn from J$147.46Bn in 2023. Advertising and marketing spending also increased by 21.6% to $4.76Bn, as GK boosted promotional activities to support revenue growth. Rising transportation and distribution costs, tied to both higher sales volumes and ongoing supply chain pressures also contributed to the increase.
• Lastly, finance costs were up 13.0% to $1.95Bn, largely driven by $1.01Bn from the Banking & Investments segments (+28.3%) and the insurance segment of $1.83Bn (+51.4%). The higher finance costs coincide with a YoY increase in the group’s financial liabilities (+6.4%).
• Since the start of the year, GK’s share price has declined by 6.9% to $73.48 and has a P/E of 8.72x, which is below the main market average of 12.58x.

(Source: GK Financial Statements & NCBCM Research)

• Guyana has asked the International Court of Justice to order Venezuela not to proceed with plans to hold elections in the disputed region of Esequibo, saying a vote would violate a prior court ruling, the Guyanese foreign ministry said.
• Venezuela will hold provincial elections on May 25, including for state governors. The government of President Nicolas Maduro last year passed a law creating a new state in the disputed territory, despite the ongoing case at the ICJ over which country Esequibo belongs to and a 2023 court order that Venezuela avoid actions that change the status quo in the territory.
• Guyana said in a statement that the United Nations' top court should prohibit Venezuela from conducting elections in the 160,000-square-km (62,000-square-mile) area, which it said "flagrantly violates" the 2023 order. Guyana said it also requested expedited hearings to prevent what could be "serious and irremediable prejudice" to its rights.
• The Venezuelan communications ministry did not immediately respond to a request for comment. Tensions rose last weekend in the dispute over Esequibo – which comprises more than two-thirds of Guyana – when Guyana said a Venezuela coast guard patrol entered its waters and approached an output vessel in an offshore oil block managed by ExxonMobil.
• The Venezuelan government said the waters they entered are a maritime zone pending delimitation in accordance with international law. A final ICJ decision on the dispute could take years.

(Source: Reuters)

• Brazil's economy is forecast to have moderated in the final quarter of last year due to slower growth in private consumption and investment, a Reuters poll showed. The economy expanded by 0.5% in October-December over the previous three-month period, according to the median estimate of 21 economists polled February 26-March 3. The yearly rate was estimated at 4.1%
• A 0.5% rise would imply a deceleration from 0.9% in the third quarter. "This step down was... led by slower (private) consumption and the first decline in investment in over a year," J.P. Morgan analysts wrote in a report. "Solid government consumption, a slightly positive contribution from net exports, and inventories should have contributed to a positive growth rate at the end of last year."
• The flip side of Latin America's No.1 economy's reliance on federal spending is increased fiscal worries, which have led to a selloff in the markets. At the same time, foreign direct investment increased less than the current account deficit last year, limiting Brazil's economic expansion. On the supply side, LCA 4intelligence economist Bruno Imazumi said he projected quarterly rises of 0.4% in services, 0.1% in industry, and 1.8% in agriculture.
• "Within services, we will see a still strong number for financial intermediation, insurance, supplementary pension and related services subsector," he added. Overall, the gross domestic product data to be released on Friday will probably confirm that economic growth closed 2024 well above weaker initial market estimates.
• Analysts had already upgraded their forecasts throughout last year to account for a solid job market and increased social spending, which countered the negative effect of high interest rates. In January, the latest consensus estimate of a Reuters poll pointed to annual growth of 3.4% for 2024, more than double the 1.6% rate seen at the start of last year.
• For 2025, Brazil's government cut its forecast to 2.3% last month as the central bank continued its monetary tightening cycle. The economic team also lifted inflation projections. Still, a senior government official said last week that the administration would not take exceptional measures to boost growth and reaffirmed its commitment to Brazil's fiscal framework.

(Source: Reuters)

• The number of Americans filing new applications for unemployment benefits fell more than expected last week, suggesting that the labour market remained stable in February, though turbulence lies ahead from tariffs on imports and deep government spending cuts.
• That was flagged by other data on Thursday, March 6, showing layoffs announced by U.S.-based employers jumped in February to levels not seen since the last two recessions amid mass federal government job cuts, cancelled contracts and fears of trade wars.
• "Evidence is mounting that elevated uncertainty about the outlook for federal policies and still-tight monetary policy is pushing redundancies higher," said Samuel Tombs, chief U.S. economist at Pantheon Macroeconomics.
• Initial claims for state unemployment benefits dropped 21,000 to a seasonally adjusted 221,000 for the week ended March 1, the Labor Department said. Economists polled by Reuters had forecast 235,000 claims for the latest week. The decline reversed the prior week's surge, which had lifted claims to a two-month high and was blamed on snowstorms and difficulties adjusting the data for seasonal fluctuations around the Presidents Day holiday.
• A separate unemployment compensation for federal employees (UCFE) program, which is reported with a one-week lag, showed applications rising to a four-year high of 1,634 from only 614 during the week ending February 15.
• For now, the overall labour market continues to plod along. The Federal Reserve's "Beige Book" report on Wednesday described employment as having "nudged slightly higher on balance" since mid-January. Labour market stability is critical to the U.S. central bank's ability to keep interest rates unchanged while policymakers monitor the economic impact of tariffs and an immigration crackdown.

(Source: Reuters)

• Donald Trump pulled back from his trade war with Mexico on Thursday, March 6, temporarily delaying tariffs on many goods from the country once again, but he continued to attack Canada.
• Two days after imposing sweeping tariffs on all imports from his country’s closest trading partners, the US president announced that duties on a wide range of products from Mexico would be shelved until April.
• Trump has already softened the attack on Canada and Mexico, granting carmakers a one-month reprieve after they warned of widespread disruption.
• After a call with Claudia Sheinbaum, the Mexican president, Trump declared that “Mexico will not be required to pay Tariffs on anything” that falls under an existing trade deal between the US, Mexico and Canada known as USMCA. Tariffs are not paid by countries but by importers – in this case, US companies – who buy products from businesses in the targeted countries.
• “This Agreement is until April 2nd,” Trump wrote on his Truth Social platform on Thursday. “I did this as an accommodation and out of respect for President Sheinbaum. Our relationship has been a very good one, and we are working hard, together, on the Border, both in terms of stopping Illegal Aliens from entering the United States and, likewise, stopping Fentanyl.”
• The abrupt reversal and reprieve for Mexico raised immediate questions about the future of the Trump administration’s tariffs on Canada. Trump pointedly attacked Justin Trudeau, his Canadian counterpart, shortly before announcing the temporary exemption for Mexican exports.

(Sources: Reuters)

• Local Cement manufacturer, Carib Cement Company Limited (CCC) generated J$5.95Bn in earnings for FY2024, 5.9% higher than in FY2023. Marginally higher topline performance – notwithstanding Hurricane Beryl¹,   marginally lower direct costs and higher financial income which compensated for increases in operating expenses, were behind the modest growth in earnings.
• Revenues came in at J$27.91Bn, 0.7% higher year-over-year as increases in sales of cement, clinker and other goods and services locally, in the Caribbean and Central & North America largely neutralized by an 11.2% decline in Q3 sales. The Q3 sales decline occurred because Hurricane Beryl and intense weather delayed the resumption of production after its annual maintenance shutdown.
• Cost of goods sold (COGS) fell marginally (0.5%) and supported a 3.9% gross profit improvement to J$11.58Bn. The marginally lower COGS, reflect lower direct costs in Q1, Q2 and Q4, which were largely offset in Q3 when raw material costs were higher as production eventually rebounded following Beryl and the company purchased cement during its scheduled maintenance shutdown.
• Unlike COGS, operating costs climbed by 5.7% due to higher administrative, selling, distribution and logistics expenses. Despite this, operating profit still increased by 1.4% to J$8.58Bn.
• Looking ahead, CCC’s management remains confident about the future, particularly the growth potential within the local construction sector. Moreover, the completion of CCC’s major kiln expansion project, now in its final stages, is expected to further strengthen its market leadership, minimise supply disruptions from unexpected events like natural disasters and allow a sustainable cement export programme, which will bring additional foreign exchange earnings.
• Year-to-date, CCC’s stock price is up 2.94%, closing at J$84.05 on Tuesday and a P/E of 11.72x.  This is below the Main Market Energy, Industrial and Materials Sector average P/E of 13.93x.

__________________

¹Hurricane Beryl and other adverse weather conditions that disrupted cement production and resulted in lost sales during the second half of the financial year.

(Source: CCC Financial Statements & NCBCM Research)

• Supreme Ventures Limited (SVL) recorded net earnings of J$1.78Bn for FY2024, down 26.7% from FY2023 as rising expenses, increased finance costs, and a dip in other income weighed on the bottom line.

• SVL’s profit dip came despite a 3.5% increase in total revenues to J$52.67Bn. Higher revenues were supported by stronger performance in non-fixed odd wagering games and steady results from fixed odd wagering games net of prizes. However, Hurricane Beryl induced an approximately J$1.0Bn loss in gross ticket sales, which impeded the year-over-year growth and impacted its receivables portfolio.
• Other income was also down 25.9% to $0.67Bn amid lower gains on its financial assets.
• Direct costs rose by 3.2% to J$40.32Bn, driven by higher payouts for betting prizes, increased agent commissions, and greater contributions to regulatory bodies. These rising costs put pressure on margins, though gross profit still edged up to J$12.34Bn.
• Higher direct costs were compounded by operating expenses, which climbed 7.9% to J$9.11Bn. This reflected higher staff costs, increased spending on marketing and business development, and larger outlays for repairs and maintenance. These rising overheads weighed on operating profit, which declined by 8.3% to J$3.56Bn.
• With SVL’s stock price closing at J$19.06 at the end of Tuesday, the stock is down 23.0% year-to-date. This implies a P/E of 28.20x, which is higher than the 12.53x main market average.

(Source: SVL Financial Statements & NCBCM Research)

• Mexico's government may look for other trade partners, the nation's president said on Wednesday, after the United States slapped tariffs on its southern neighbour. President Claudia Sheinbaum said that Mexico could shift trade alliances "if necessary," referring to the possible continuation of the tariffs.
• S. President Donald Trump's new 25% tariffs on imports from Mexico and Canada took effect on Tuesday, along with fresh duties on Chinese goods, standing to seriously alter supply chains and long-standing trade partnerships.
• Sheinbaum is tentatively set to have a phone call on Thursday with the U.S. leader about the tariffs, she said in her daily morning press conference. If the tariffs continue after that, Mexico "will reach out to Canada and other nations," Sheinbaum noted. "It is a very definitive moment for Mexico," Sheinbaum said. "Our economy is fine, but there will be no submission. ... Depending on the circumstances, we will look to Canada and other countries."
• The Mexican peso slightly strengthened by 0.84% on Wednesday to 20.41 per U.S. dollar. In an appeal to Mexican national pride, Sheinbaum has called for a rally on Sunday in Mexico City's historic Zocalo square where she will outline her response to the United States, which she said would include retaliatory tariffs.
• S. Commerce Secretary Howard Lutnick said on Wednesday that an announcement on tariffs could come later in the day, hinting at possible relief for some sectors such as automobiles. The auto sector stands to take a heavy hit from tariffs, with parts typically crossing the border several times as cars are assembled. The United States imported $181.4Bn in autos and auto parts from Mexico in 2024, representing nearly 10% of Mexico's economy, according to Goldman Sachs.

(Source: Reuters)

• Trinidad and Tobago need to put proper policies in place to transform the foundations of the Carnival activities, underwriting their evolution into a competitive industry in the global marketplace. This is the advice from economist Dr Vanus James following comments made by Prime Minister Keith Rowley who described the heavy foreign exchange expenditure on Carnival costumes as “absolute foolishness.”
• Rowley who made the statements while speaking at Wednesday’s sod-turning ceremony for Nutrimix’s animal feed and pet food plant on the Point Lisas Industrial Estate, said costumes should be locally sourced.
• Meanwhile, Dr Marlene Attzs, a development economist, also agreed that the Carnival “business model” must also be redesigned so it becomes a net earner of forex rather than a forex drain. Attzs further advised that while the discussion on the use of scarce forex for importing Carnival materials is important, the issue should not be viewed in isolation. Moving forward, she said T&T must rethink its consumption habits, reduce dependence on imports, and acknowledge the reality of dwindling foreign exchange supply. “Without strategic interventions, we risk deepening the crisis and further eroding our economic stability,” she added.
• In its November 2024 Monetary Policy Report, the Central Bank highlighted those purchases of foreign exchange by authorised dealers (supply) from the public amounted to US$3.72Bn from January to October 2024, a 0.7% decrease relative to the same period a year earlier. The marginal decrease in purchases followed a 0.3% rise in conversions by energy companies compared to the same period in 2023. Between January to October 2024, purchases from the energy sector accounted for 72.7% of total foreign currency purchases over US$20,000 in value.
• Sales of foreign exchange by authorised dealers to the public (demand) reached US$4.92 billion over January to October 2024, a 5.7% decrease relative to the same period a year prior.
• Based on reported data for transactions over US$20,000, credit cards (43.7%), energy companies (17.1%), retail and distribution (15.8%), and automobile companies (5.3%) made up the bulk of foreign exchange sales by authorised dealers to the public. The net sales gap reached US$1.20Bn during the period. To support the market, the Central Bank sold US$1,075.0Mn to authorised dealers.

(Source: The Trinidad & Tobago Guardian)

• A divided U.S. Supreme Court declined on Wednesday, March 5, to let President Donald Trump's administration withhold payment to foreign aid organisations for work they already performed for the government as the Republican president moves to pull the plug on American humanitarian projects worldwide.
• Handing a setback to Trump, the court, in a 5-4 decision, upheld Washington-based U.S. District Judge Amir Ali's order that had called on the administration to promptly release funding to contractors and recipients of grants from the U.S. Agency for International Development and the State Department for their past work.
• Chief Justice John Roberts and fellow conservative Amy Coney Barrett joined the court's three liberal members to form a majority in rejecting the Trump administration's request. Conservative Justices Samuel Alito, Clarence Thomas, Neil Gorsuch and Brett Kavanaugh dissented from the decision.
• The order by Ali, who is presiding over an ongoing legal challenge to Trump's policy, had originally given the administration until February 26 to disburse the funding, which it has said totalled nearly US$2Bn that could take weeks to pay in full.
• Roberts paused that order hours before the midnight deadline to give the Supreme Court additional time to consider the administration's more formal request to block Ali's ruling. The Supreme Court's 6-3 conservative majority includes three justices Trump appointed during his first presidential term.
• The court did not provide a rationale for its unsigned order on Wednesday. With the original deadline now lapsed, the court instructed Ali to "clarify what obligations the government must fulfil to ensure compliance with the temporary restraining order, with due regard for the feasibility of any compliance timelines."
• Ali has a hearing scheduled for Thursday at the request of the plaintiffs for a preliminary injunction. The judge has a temporary restraining order currently in place that lasts until March 10.

(Source: Reuters)