Trigger warning for Jamaica Broiler shareholders!  Their next financial reports are coming up, and it’s not going to be pretty!

 

So in JBG’s Q3 report earlier this year, the company reported a net loss of over one billion Jamaican Dollars. Most of that was due to a 2 billion Jamaican dollar dip on the US side of the business. That’s about 13 million USD. 

 

Additionally, management said they found several issues related to expense management and operation control in the US segment. They mentioned that external advisors and auditors would be reviewing the US operations and deciphering what implications, if any, these issues had for the financial performance of the US business.

Well, the preliminary results are in, and it’s not pretty. 

The company is pointing to what it calls “unsubstantiated accounting valuation methodologies”.  They said this will affect several line items, including inventories and biological assets.

Taking Stock Analyst David Rose called it a red flag.

So the math ain’t mathing. JBG also highlighted that the issues also appear to affect prior periods, which means they will have to go back and update previous financial statements. 

How many statements will this affect? One quarter? Two? One year? Two years? We don’t even know, because these were just the preliminary results.  Once the findings are finalised, then investors will be able to see the full picture. 

Now to be clear, this is only affecting the US business. The Jamaican business is still going strong. And changes have already been made in the US. Group CEO Christopher Levy took over direct control of the US division. They gutted the entire US management team, and within two weeks of Jamaican executives taking over, the chicken processing plant yield grew from 56 percent to 62 percent.

In its statement, JBG emphasised that the Board and Senior Management have been working to resolve the issues in the US business and are committed to accurate financial reporting.

They’re also being very transparent and proactive, which I’m sure investors can appreciate. Instead of seeing massive negative changes in its results, there’s a heads up and an explanation.

JBG is also 60 years old, so they have experience navigating difficult times and the expertise to right the ship.

And that’s the bottom line.

So what do you think of this latest JBG update? Let me know in the comments.

And if you want to learn to invest in companies like Jamaica Broilers, go to investingforbeginnersja.com.  

 

Let’s get this money!