Geopolitical shaking affects Jamaican Teas

 




For the period ended March 2025, its second quarter, Jamaican Teas Limited (JAMT) reports how geopolitical developments around the world depleted financial assets held by the group. .

While sales rose in its manufacturing and retail segments, investments dipped as during this quarter there were significant declines in the prices of many stocks listed on both the Jamaica Stock Exchange and USA Stock Exchanges.

The largest price declines were in the USA. This resulted in significant unrealised losses in investments. Following from this, QWI Investments Limited (QWI) reported a net loss of $130 million for the quarter, a $182m reversal from their year ago profit of $52m.

Management concluded in their second quarter report, “ The effects of the new USA tariffs on our USA exports is still unclear. Notwithstanding this the group remains cautiously optimistic about its future.”

For the group, net profit attributable to shareholders was $52.9 million for the half year to 31 March 2025 up from $21.6 m a year ago. The year ago, figure is net of a non-recurrent loss of $92.49 million from the sale of its Bell Road factory in March 2024.

In the manufacturing division revenues increased 19 percent in the quarter and the half year, driven principally by a strong performance in the export market where revenues grew by 22 percent in the quarter and 29 percent for the half year. Domestic sales grew by 13 percent in the quarter and 3 percent for the half year.

No real estate sales were booked in the quarter but sales of two units were completed in the first quarter.

In the retail division, which is inclusive of supermarket sales, retail revenues increased 7 per cent. Management commented, “This slowing in the revenue growth we have seen in our store mainly reflects the Easter holidays falling in April this year versus March of 2024.”

Retailing profits increased by approximately 3 percent for the half year, reflecting in part continued pressure from higher wages and security expenses.

Under investments, QWI’s unrealized losses on its overseas investments mirrored the decline in the main USA market indices which fell in response to a series of unexpectedly high new trade tariffs on imported goods announced by the US Government during the quarter.

Losses on the Jamaican portfolio were greater than the declines in the JSE market indices mainly because of the occurrence of several unrelated adverse developments in five of Jamaica Teas’ largest Jamaican holdings.

Total revenues for the quarter increased by $26 million or 3 per cent overall from $800 million a year ago to $826 million this quarter. This occurred despite the absence of real estate sales March quarter versus $85m of sales in the year ago period.

  For the year to date, the increase in overhead costs largely reflected increased costs for wages, salaries and depreciation charges. The increase in interest expense during the quarter resulted from increased short-term borrowings by QWI.

The Net Loss attributable to Jamaican Teas for the quarter totaled $0.6 million versus a net profit, after adjusting for the loss on the sale of the Bell Road factory, of $73 million in the year ago quarter. Adjusted net earnings per share was 0.0 cents (2022/23 – earnings of 3.4 cents).

 For the year to date, net profit attributable to Jamaican Teas was $52.9 million versus $114.2 million, after adjusting for the loss on the sale of the Bell Road factory, in the previous year.

Adjusted earnings per share was 2.4 cents (2022/23 – earnings of 5.2 cents).

A net increase in fixed assets since September 2024 is due mainly to $69 million of capital improvements and machinery purchases at the Temple Hall factory. Housing inventories fell by $54 million due to the sale of two units at Belvedere, while other inventories fell by $122 million reflecting improvements in purchasing practices at the Temple Hall factory.

Receivables increased during the half year reflecting the increased scale of operations in  manufacturing activities.

Caribbean Money Daily





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