Seprod Holds Its Ground as Tourism Headwinds Weigh on ASBH and CPJ

• Seprod Limited (Seprod) and its subsidiaries, A.S. Bryden & Sons Holdings Limited (ASBH) and Caribbean Producers (Jamaica) Limited (CPJ), faced similar headwinds in Q2 2026, but differences in diversification and tourism exposure produced sharply contrasting results. Seprod proved the most resilient, growing net profit 16.3% despite a 2.6% revenue decline. ASBH remained profitable, but earnings plunged 92.3%. However, CPJ swung to a loss as depressed hotel and restaurant volumes continued to weigh on its hospitality-heavy business.

Seprod’s Diversification Cushions Weak Demand

• Seprod’s diversified operations and cost discipline provided the strongest buffer against weaker demand in its subsidiaries. Revenue declined 2.6% YoY to J$36.51Bn, primarily reflecting weaker demand from Jamaica’s tourism sector, while gross profit fell 3.8% to J$9.75Bn as elevated energy and raw material costs added further pressure. Consequently, gross profit margin edged down to 26.7% from 27.0%. However, tighter cost management more than offset this decline, with other operating expenses declining 5.9%.
• The improvement below the gross-profit line allowed Seprod to convert weaker sales into stronger earnings, with Q2 net profit rising 16.3% to J$687.64Mn and net margin improving to 1.9% from 1.6%. The first-half performance was even stronger, as net profit increased 62.4% to J$2.34Bn despite a 3.0% reduction in revenue to J$72.93Bn. However, the H1 result benefited from the gain associated with the disposal of International Biscuits Limited.

Higher Costs Deepen ASBH’s Earnings Pressure

• ASBH faced broad weakness across its regional operations, resulting in significantly greater earnings pressure. Q2 revenue declined 6.8% to US$139.80Mn amid softer demand for premium beverages likely due to the Special Consumption Tax (SCT) levied on sugary and alcoholic beverages in May 2026 in Jamaica and industrial equipment in Trinidad & Tobago and the slowdown in Jamaica’s tourism sector. Operating profit fell 30.7% to US$5.91Mn, while higher finance costs contributed to earnings plunging 92.3% to US$0.21Mn. Finance costs increased 16.4% YoY to US$4.12Mn. The weakness extended through H1, with net profit for the period falling 95.4% to US$0.28Mn as revenue declined 6.5%.

CPJ Bears the Brunt of Tourism Disruption

• CPJ remained the most exposed to the lingering effects of Hurricane Melissa, demonstrating the downside of its greater concentration in Jamaica’s tourism and hospitality sector. Topline plunged 26.1% YoY to US$31.33Mn as major hotel and restaurant customers remained closed, partially reopened or operated below normal occupancy levels. Jamaica sales were down approximately 34%, while the St. Lucia business proved comparatively resilient. The volume decline also reduced CPJ’s ability to absorb fixed manufacturing and logistics costs, pushing gross profit down 30.4% to US$8.00Mn and compressing gross profit margin by 158bps to 25.5%.
• Unlike Seprod and ASBH, CPJ was unable to offset its weaker topline through cost containment, resulting in a return to losses. Administration and other operating expenses increased 6.1% to US$9.30Mn amid elevated repair, utility and restructuring costs, which contributed to the company recording a net loss of US$0.47Mn compared with net profit of US$1.49Mn in Q2 2025. The H1 picture was similarly weak, with revenue declining 27.0% to US$64.47Mn and the Group recording a US$1.64Mn net loss versus a US$3.29Mn profit in the prior-year period.

Tourism Recovery Offers Upside, but Valuations Diverge

• Looking ahead, Jamaica’s tourism recovery should provide a common tailwind, but the pace and magnitude of the earnings rebound is likely to remain uneven. CPJ expects operating conditions to strengthen during H2, particularly in Q4 as hotel occupancy normalises, while its continued integration into the wider Seprod and Brydens platform should create opportunities for distribution synergies, improved procurement and greater operating efficiency. ASBH is similarly pursuing regional integration, centralised warehousing, brand expansion and cost rationalisation, with its improving cash generation and lower borrowings providing additional support. Seprod enters this recovery phase from the strongest position of the three, supported by greater diversification, improved liquidity and ongoing debt reduction. However, elevated input and energy costs, macroeconomic uncertainty and the pace of Jamaica’s tourism recovery remain key downside risks to the broader group’s H2 performance.
• Despite the longer-term benefits expected from integration, investors appear to be more focused on the near-term challenges and have remained cautious on all three stocks. As at August 18, 2026, Seprod, ASBH and CPJ closed at J$75.01, J$5.15 and J$24.98, respectively, representing YTD declines of 10.6%, 32.1% and 17.7%. At these prices, Seprod and ASBH trade at P/E multiples of 10.15x and 6.28x, respectively, below the Main Market Distribution & Manufacturing average of 14.01x, while CPJ trades at a substantially higher 31.81x. The valuation gap is particularly notable given CPJ’s current earnings weakness, suggesting that its premium multiple embeds greater expectations for an earnings recovery as Jamaica’s tourism sector normalises.

(Sources: JSE & NCBCM Research)