THE ECONOMY

For the calendar year 2006, real Gross Domestic Product
is estimated to have grown by 2.5 percent, the highest
growth rate in eleven years.  The main sectoral contributors were  agriculture, up by 15.9 percent; and services, including tourism, up by 9.9 percent. In the
final quarter of the year the growth rate was 2.7 percent: the agriculture sector grew by 12.4 percent fostered by improved weather conditions and initiatives to improve production and productivity whilst the manufacturing sector was impacted by the closure of the petroleum refinery for most of the period. Inflation for the year was 5.8 percent, the lowest level since 1981; the reduction in
inflation was facilitated by the improved performance of agriculture with the consequent reduction in domestic food prices. The Fiscal deficit for the period October- December 2006 was $21.1 billion; total Expenditure at $72.8 billion exceeded budget by $8.8 billion and total
Revenue at $51.7 billion fell below budget by $2.5 billion. At the end of the quarter the debt stock at $925.8 billion was 11.9 percent above the previous year; the domestic debt component was $536.7 billion and the external debt was U$5.8 billion ($389.1 billion).The External trade account deteriorated during January-October compared with the corresponding period in 2005.The external trade deficit increased by 15.1 percent to U$3.1 billion; merchandise exports increased by 30.8 percent to U$1.6 billion while imports grew by 20.1 percent to U$4.7 billion. The average annual value of the domestic currency
depreciated by 5.4 percent to J$ 65.98 to U$1.0 and the Net International Reserves increased by 15 percent to U$2.3 billion.

THE LIVESTOCK SUB-SECTOR

In 2006, the livestock sub-sector is estimated to have registered a decline in output of 7.6 percent. The total weight of animal slaughtered fell from 122,115,000 kg in year 2005 to 118,110,000 kg in year 2006.

In the case of beef, the total number of cattle slaughtered fell from 49,624 head to 28,451 head. Consequently, output fell by 42.7 percent from 10,391,000 kg to 6,003,000 kg. The poultry output increased by
2.5 percent from 101,513,000 kg in year 2005 to 104,012,000 kg in year 2006. In the Pig Sector the number of animals slaughtered also declined from 158,853 head in year 2005 to 134,002 head in year 2006,
and there was a 9.7 percent reduction in output to 7,420,000 kg. The output of goat meat also declined by 12.4 percent in year 2006 from 765,000 kg to 670,000 kg. Milk production increased marginally by 2.7% for year 2006. In the year 2006 157 million eggs were produced,
compared with 92.7 million in year 2005, an increased of 69.5 percent.

The downturn in the sub-sector relating to beef, pork and goat meat was due in large measure to a series of factors, including rebuilding of herds, praedial larceny and    increased input costs.

FINANCIAL RESULTS

The group sustained a loss before tax of $12.03 million in 2006 compared with a profit of $11.8 million in 2005; loss per share was 23.4 cents. Gross operating revenue increased marginally to $1.15 billion; the cost of operating revenue increased slightly to $348.0 million, and
other income rose by 3.2 percent to $366.2 million. Expenses, excluding finance costs, increased by 9.5 percent and finance costs, increased by 9.5 percent and finance costs increased by 17.9 percent to $37.7 million.

OUTLOOK

In the first quarter of 2007, it is expected that Gross Domestic Product will increase by 2.9 percent. Although it is anticipated that poultry production is likely to increase by 5.0 percent, the overall livestock sector is expected to decline because of the impact of praedial larceny
on the beef, pork and goat meat farmers. The Board of Directors and the management are resolved to intensify their efforts in collaboration with the Ministry of Agriculture to bring this situation under control.

ACKNOWLEDGEMENT

The management is fully cognisant of the challenges it will face in the year ahead. Nonetheless, we remain confident that with the support of our customers, staff and directors improved results can be achieved in the year ahead.

…...............................................
Dr. John Masterton
Chairman
……............................................
Henry J. Rainford
Managing Director & C.E.O