– Group “optimistic about future” after “extremely challenging year” – Chairman
Despite a year that was plagued by the novel coronavirus pandemic coupled with the impasse of the March 2020 General and Regional Elections, Demerara Distillers Limited (DDL) has recorded $3.893 billion in profit after taxation in 2020, reflecting an increase of 11.7 per cent or $408 million over the preceding year.
In his Annual Report for the year ending December 2020, Chairman of the local beverage giant, Komal Samaroo said the DDL Group’s profit before tax was $5.206 billion.
He added that net cash generated from the Group’s activities last year was $4.8 billion. This, he noted, facilitated the self-financing of capital expenditure of the Group totalling $2.1 billion.
Additionally, bank borrowing at the end of 2020 in the form of loans and overdraft was reduced from the previous year by over $1 billion. Earnings per share in 2020 was $5.06 compared to $4.53 last year. Shareholders’ equity at the end of the year was $31.987 billion, reflecting an increase of $4.183 billion or 15 per cent over 2019.
Samaroo said 2020 was an extremely challenging year for the DDL Group, and the country.
“In addition to the negative effects of the ongoing global coronavirus pandemic (COVID-19), the failure to finalise the results of the General and Regional Elections, held in Guyana on March 2, 2020, for five months added to the economic and social strain on the population,” he noted.
Despite this, however, the Chairman revealed that the Group’s turnover in 2020 was $24,686 billion compared to $22,403 billion in the previous year, representing an increase of $2.2 billion or 10.2 per cent.
“COVID-19 had a severely negative impact on the export of branded products in the Caribbean, where the revenue declined was -33.5 per cent. However, improvements in the North America and Europe compensated for that shortfall, resulting in the Group ending the year with overall export of branded products at approximately the same level as the previous year. Turnover of bulk exports in the year, exceeded that of the previous year by 10 per cent. Compared to 2019, turnover in the domestic market increased overall by 11 per cent in 2020,” Samaroo said.
Further, he reported that an Interim Dividend of $0.30 per share was paid in December 2020. The Board of Directors recommended a Final Dividend of $0.95 per share, which if approved at the upcoming Annual General Meeting on April 23, will take the total dividend for last year to $1.25 per share, against $1.15 in 2019.
This proposed dividend payment would amount to $962.5 million.
Regarding capital expenditure, the Chairman reported that the completion of the TOPCO Fruit Processing and Packaging Plant Expansion was substantially delayed as the implementation of COVID-19 measures impacted the targeted schedule.
“The TOPCO Operations had to resort to extraordinary measures in order to achieve substantial completion of the project. In addition, the internal health and safety protocols implemented by the Group to protect employees, contractors and other third parties from the possibility of contracting COVID-19 was a major challenge for the Project Management Team to get the civil works on the buildings, roadways and other infrastructure implemented in keeping with planned schedules,” he stated.
Notwithstanding these challenges, Samaroo reported that the Juice Processing and Packaging Equipment was successfully commissioned and approved for commercial production of 1-litre products, which commenced in February. The Fruit Processing Plant was expected to be completed in the first quarter of this year, while the Milk Processing Plant is slated for completion in the second quarter of 2021.
The DDL Group spent some $1.2 billion on these expansion projects last year. Another $215 million in expenditures were injected into the rehabilitation and upgrade of the Bio-Methanisation Plant.
Meanwhile, in response to the COVID-19 pandemic, DDL launched the ENVIRON Sanitising Cleaner in March 2020 to meet the critical need in the local market. The company has made significant donations of this product to various organisations for public and charitable use.
Additionally, it partnered with Digicel Guyana and presented students in the DDL Foundation, who are in need, with electronic tablets and mobile data to participate in online learning.
Internally, DDL staff have had to adjust to exclusive online platforms for meetings, trainings and various webinars. These online platforms, DDL said, will now be the foundation of a new era for alternative training as well as engagement within the Group.
Going forward, the Chairman said they will continue to build their branded businesses and aim to widen targeted markets, while also continuing to develop sustainable supply chain relationships for bulk products with major international companies.
“With the scheduled completion of TOPCO’s expansion this year, we will continue to aggressively pursue our strategy of diversification. In this regard, several products and projects are under active consideration,” he noted.
Moreover, the company continues to engage the local sugar industry so that it can return exclusively to local sourcing of molasses, having had to import 23 per cent last year for its distillery needs.
According to Samaroo, with Guyana’s real GDP set to grow by 20.9 per cent and non-oil economy by 6.1 per cent this year, the Group is aiming to take full advantage of the opportunities that a strong national economic environment present.
“We hope that the COVID-19 pandemic would be brought under control in 2021 so that further adverse effects could be averted… We are optimistic about the future and look forward to joining hands with all our stakeholders as we continue our journey to constantly improve, add value, diversify and expand our Group,” the Chairman posited.
In order to abide by the national COVID-19 guidelines, DDL has developed a hybrid format, which was approved by the High Court, to enable a 40 per cent physical attendance at the upcoming AGM while the other shareholders can join virtually.