Jamaica Producers Group has careened further off-track, with a massive net loss of $2.86 billion, a near sixfold decline, in its financial position at yearend December 31.

But it was not so much the size of the loss, but the misfortunes of one of its subsidiaries - though the two are interrelated - that caused the agro-producer to delay the posting of the results which came out on weekend, JPG has said.

The results were more than a month late because certain financial information linked to Serious Foods Limited were in the control of administrator PricewaterhouseCoopers in the United Kingdom, said Chief Executive Officer Jeffrey Hall.

JPG had first to secure the data, then prepare the accounts using different accounting principles, he told Wednesday Business.

Still, as deep as the losses were for his company, Hall was upbeat in an interview this week, perhaps buoyed by the $45.4 million of net profit that JPG managed to eke out in the first quarter ending March 28, 2009, from continuing operations.

It is not a massive sum by current measures, in a company whose turnover is counted in billions, but that $45 million represents a strong turnaround from the $312.7 million of losses JPG made in the comparative first quarter of 2008.

And it flowed from $1.3 billion of revenue, a fourfold growth from the $339.6 million that those same businesses grossed in the year prior period.

The boost in top-line income was largely from new acquisition Hoogesteger, which grew JP Europe's revenue by 383 per cent to $990 million, according to Chairman Charles Johnston, in his statement to shareholders.

Hoogesteger was acquired in July 2008 for $840.5 million.

Hall also said the first quarter performance was due to JP's exit of lossmaker Serious Foods Limited.

"2008 was a difficult year. We went into an economic downturn and we face many adversities, but our objective is to come out of this economic downturn making a profit," said Hall.

"I would not say we are satisfied, but taking steps in the right direction."

At the top of this year, JP made the decision to place Serious Foods, its UK-based subsidiary that accounted for more than 70 per cent of its sales, into administration for restructuring in preparation for selling off the business.

Interest in subsidiaries

At yearend December 31, JP booked a $1.64 billion loss on discontinued operations, and had a $962 million charge linked to disposal of interest in subsidiaries.

Prior to JP's exit from Serious Foods business, the company also ceased banana production in Jamaica for export to the United Kingdom, citing major losses as a result of several hurricanes.

"The group is now a smaller group but is more profitable and has a better platform for growth," said Hall.

The company is also banking on its newest business, JP Tropical Foods division, which handles JPs snack operations, to reinvigorate the company.

It has a steep hill to climb, given its truncated balance sheet. A year ago, at March 2008, JP's net worth or net asset value was $9.12 billion; at March 2009, that value has eroded by 53 per cent, to $4.3 billion.

JP's primary focus now, according to Hall, is on its fruit processing/snack business and its fresh juices and smoothies business in The Netherlands.

"We see good potential in both and they complement each other," Hall explained.

With the opening of its snack factory in the Dominican Republic (DR) now allowing for an expanded capacity in plant to the Jamaican operation, the company has since, in February, launched its newest line of banana chips under the brand name Nixx.

Nixx, which currently comes in three flavours - cheese, original and barbecue - at present just serves the DR market but the flavours are expected to be launched in Jamaica under the company's St Mary's banana chips brand.

Soft launch

"We had a soft launch of the barbecue flavour and now doing market testing on it, with anticipated formal launch by summer," said Hall.

The Dom Rep factory, however, which is about 33,000 square feet, built in a joint partnership with a local agribusiness firm, produces around 800,000 units per week and also supplements the Jamaican market.

According to Hall, the JP Tropical Foods division, whose major growth engine is snacks, has recorded year-on-year growth of over 50 per cent.

For the March 2009 quarter, JP Tropical Foods made $9.6 million in profits on revenues from continuing operations of $292.9 million.

"JP expects to deliver further growth through new snack lines - including cassava - and new flavours such as barbecue, and has also seen strong growth in the export markets - particularly the United States," said Hall.

sabrina.gordon@gleanerjm.com