It looks like Jamaica Broilers is gonna skip their next dividend payment. So what’s going on?
So going as far back as 2001, Jamaica Broilers has paid dividends twice a year, in March/April and then again in October/November. But as David Rose pointed out in this article, JBG has skipped their normal dividend consideration meeting for March.
That really shouldn’t come as a surprise since the company reported a net loss of over one billion Jamaican Dollars for the third quarter. Now a one billion dollar loss is shocking by itself but it’s even more shocking when you consider that last year, the company had a profit of one point three billion dollars. So what’s happening?
Well, the group’s overall decline was mostly because of a 2 billion Jamaican dollar dip on the US side of the business. That’s about 13 million USD.
In its Q3 report, JBG said management found several issues related to expense management and operation control in the US segment.
A large part of the problem is that in Q3, the US business recorded a lot of invoices that weren’t accounted for in previous reporting periods. That made the group’s operational expenses like distribution and administration jump from 3.7 billion to 5.2 billion.
Group CEO Christopher Levy also told Journalists that there were a lot of inefficiencies at its chicken processing plant.
He said that the plant yield grew from 56 percent to 62 per cent in just two weeks after Jamaican executives took over.
In response to the issues, JBG has made significant management changes. They’ve gutted the US management team, including President of the US operations, Stephen Levy, who is expected to step down in May.
Group CEO Christopher Levy will take over direct control of the US division.
But it’s not all doom and gloom. Chris Levy said the US business is still really strong, and now that they’re working on inefficiencies and cost control, things should turn around in the next fiscal year.
And that’s the bottom line.
So what do you think? Can Jamaica Broilers turn it around by next year? And will you be buying this stock?