The Demerara Distillers Limited (DDL) Group has realised some 6 million in taxed profits for the first half of the 2017 financial year.
According to Chairman Komal Samaroo, in the company’s 2017 Interim Report, the Group’s profit for the year before taxation was 47 million, compared to 93 million in 2016, thus reflecting an increase of 4 million, or almost 13 per cent. The after-tax profit was recorded at 6 million, compared to 5 million earned in the first half of the previous year, representing a 16 per cent increase in profit.
The Chairman noted that the Group continued to experience intensified competition in most markets and it is from this perspective that these results should be viewed.
DDL Chairman Komal Samaroo
Samaroo reported that turnover for the first half grew by seven per cent over the previous year, increasing from $8.5 billion to almost $9.1 billion. While turnover in the domestic market was relatively flat, increasing marginally by 0.5 per cent in the period, turnover in its international markets grew by an impressive 20 per cent.
The Group Chairman said, therefore, that DDL would continue to place great emphasis on the development of its brands, particularly, in its overseas markets. In order to sustain growth of its aged rum portfolio, the Group, according to Samaroo, will be investing in a new warehouse to accommodate an additional 30,000 barrels of rum for aging.
The Group said in its half-year report that it also planned to phase several projects to modernise its distribution business as well as its production operations so as to maintain its competitive edge while expanding revenue. Additionally, the development of its human resource capacity to meet future demands continues apace.
For the 2016 financial year, the Group accumulated $296 million in taxed profits. Profit for the year before taxation was $2.920 billion, compared to $2.797 billion in 2015, thus reflecting an increase of $123 million, or almost 4.4 per cent. The after-tax profit was recorded at $2.191 billion, compared to $1.895 billion earned in 2015, representing a 16 per cent increase in profit.
In that same year, the Group’s subsidiaries recorded a profit before tax of $358 million in 2016, as against $313 million in 2015. However, this increased profitability escaped the Demerara Shipping Company Limited (DSCL), which made a profit of $102 million in 2016, compared with $146 million in 2015. This decline, Samaroo explained, was as a result of the reduced volume of cargo handled by the lines represented by the shipping company.
The profitability trend completely evaded Tropical Orchard Products Co Ltd (TOPCO), which experienced a loss of $16 million last year, whereas it had recorded a $20 million profit the previous year.
“This was due primarily to the loss of the school feeding programme contract (which had already been awarded to an overseas company), a matter which TOPCO successfully contested at the Bids Protest Committee…TOPCO had to write off inventory totalling $21.2 million in packaging material and finished product,” the Chairman explained.
He explained that the performance of the Group’s overseas subsidiaries had nevertheless made up for these losses by contributing $185 million in profit before taxation for 2016, compared with $172 million recorded in the previous year. The Demerara Distillers St Kitts Ltd recorded a profit of $25 million; Demerara Distillers USA Inc recorded $41 million in profit; Demerara Rum Company Ltd recorded $31 million profit, and the subsidiary in Europe recorded a profit of $88 million.
According to the Chairman, notwithstanding the Group’s complete withdrawal from the commodity bulk rum market in 2016 and the consequent absence of any sales in that segment for the year, the Group’s overall revenue for 2016 increased, though marginally, over 2015 by $89 million, or 0.5 per cent.
Samaroo had said Guyana’s economic outlook has been improved with the announcement of significant petro-carbon deposits offshore. To this end, the DDL Group would be expanding its several businesses to take full advantage of the opportunities that may arise from improvement in the domestic economy. (Samuel Sukhnandan)
