GK 9M Earnings Down 7.7%

  • Food and Financial Services conglomerate, Grace Kennedy Group Limited (GK), reported a net profit of $6.11Bn for the nine-months ending October 2025. This represented a 7.7% year-over-year (YoY) decline, driven by weaker operating performance in its Food and Money Services segments.
  • Revenues amounted to $133.89Bn, reflecting a 5.9% year-over-year increase from $126.39Bn.
  • Notably, the Food segment, GK Foods, recorded higher revenues compared to the prior year, driven by the strong performance of its international food business. However, higher-than-anticipated operating expenses weighed down the division’s overall profitability. Similarly, the Jamaican distribution business experienced revenue growth but also faced higher-than-expected warehousing and logistics costs.
  • In the Financial Services segment, earnings before tax increased across all sub-segments except Money Services, which recorded a 24.7% decline due to ongoing challenges in the key remittance market, such as the 1% excise tax on cash-based remittance transfers from the U.S., that may have reduced the volume of transactions. The Insurance segment delivered a solid 9.0% increase, supported by growth in its motor and property insurance portfolios. Meanwhile, the Banking and Investment business was up 9.0%, driven by the expansion of First Global Bank’s loan portfolio and disciplined cost management.
  • Management continues to assess the full impact of Hurricane Melissa on its profit and loss, as several of its facilities sustained damage. However, operations have resumed in the eastern parishes. Looking ahead, while key facilities, including the Agro-Processors plant in Hounslow, the Montego Bay distribution centre, and the Grace Food Processors (Meats) plant in Savanna-la-Mar, were affected, there are opportunities for the Company to increase revenues and earnings to partially offset potential declines. Increased demand for products from unaffected food facilities, as well as expected growth in the Money Services segment driven by higher transaction volumes, should bolster the company’s performance. Nonetheless, this will be partially tempered by higher insurance payouts, which may ultimately reduce overall earnings.
  • GK’s stock price has declined by 12.6% year-to-date, closing at $72.17 on Tuesday. At this price, the stock is trading at a price-to-earnings (P/E) ratio of 9.11x, which is marginally lower than the Main Conglomerate Sector’s average of 9.2x.

(Sources: JSE & NCBCM Research)