DDL records $ 3.8B in profit after tax – Guyana Times
– Group “optimistic about the future” after “extremely challenging year” – Chair
Despite a year plagued by the new coronavirus pandemic and the March 2020 General and Regional Elections disaster, Demerara Distillers Limited (DDL) has recorded $ 3.893 billion in profit after tax in 2020, reflecting an 11.7 percent or $ 408 million over the prior year. In his Annual Report for the year ending December 2020, Chairman of local beverage giant Komal Samaroo said DDL Group’s pre-tax profit was $ 5.206 billion. It added that net cash generated from the Group’s activities last year was $ 4.8 billion. This, he noted, facilitated the self-financing of the Group’s capital expenditures, totaling $ 2.1 billion. In addition, bank lending at the end of 2020 in the form of loans and overdraft from the previous year was reduced by over $ 1 billion. Earnings per share in 2020 was $ 5.06 compared to $ 4.53 last year. Shareholder equity at the end of the year was $ 31.987 billion, reflecting an increase of $ 4.183 billion or 15 percent over 2019. Samaroo said 2020 is an extremely challenging year for the DDL Group, and the country. “In addition to the negative effects of the ongoing global coronary virus pandemic (COVID-19), the failure to complete the results of the General and Regional Elections, held in Guyana on March 2, 2020, for five months added to the economic and social . stress 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 percent. “COVID-19 had a serious negative impact on the export of branded products in the Caribbean, where revenues fell by -33.5 per cent. However, improvements in North America and Europe made up that shortfall, resulting in the Group ending the year with overall export of branded products at the same level as the previous year. Bulk exports turnover in the year was higher than the previous year’s turnover of 10 per cent. Compared to 2019, turnover in the domestic market increased by 11 percent overall in 2020, ”said Samaroo. Further, it reported that a Provisional Dividend of $ 0.30 per share had been 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, takes the total dividend for last year to $ 1.25 per share, versus $ 1.15 in 2019. This proposed dividend payment would amount to $ 962.5 million. With regard to capital expenditure, the Chair reported that the completion of the TOPCO Fruit Processing and Packaging Equipment Expansion was delayed as implementation of COVID-19 measures impacted on the targeted timetable. “TOPCO Operations had to resort to extraordinary measures in order to substantially complete 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 presented a major challenge for the Project Management Team to obtain the civil works on the premises, the roads and other infrastructure implemented in accordance with planned timescales, ”he said.
Expand Despite these challenges, Samaroo noted that the Juice Processing and Packaging Equipment had been successfully commissioned and approved for the commercial production of 1-liter products, which began in February. The Fruit Processing Equipment was due for completion in the first quarter of this year, while the Dairy Processing Plant is slated for completion in the second quarter of 2021. DDL Group spent approximately $ 1.2 billion on these expansion projects last year. Another $ 215 million in spending was injected into the rehabilitation and upgrading of the Bio-Methanization Equipment. Meanwhile, in response to the COVID-19 pandemic, DDL launched ENVIRON Sanitary Cleaner in March 2020 to meet critical need in the local market. The company has made significant donations of this product to various organizations for public and charitable use. In addition, it partnered with Digicel Guyana and introduced electronic tablets and mobile data to students at the DDL Institute, who are in need, to participate in online learning. Internally, DDL staff have had to adapt to unique online platforms for various meetings, training sessions and webinars. These online platforms, says DDL, will now be the foundation of a new era for alternative training as well as engagement within the Group. Going forward, the Chairman said that they will continue to build their branded businesses and aim to expand targeted markets, while continuing to develop sustainable supply chain relationships for bulk products with large multinationals. “With the completion of this year’s TOPCO extension, we will continue to aggressively pursue our diversification strategy. In this regard, several products and projects are being actively considered, ”he noted. In addition, the company continues to engage with the local sugar industry so that it can only return to locally sourced molasses, having had to import 23 percent last year for its distillery needs. According to Samaroo, with Guyana’s real GDP set to grow 20.9 percent and a non-oil economy 6.1 percent this year, the Group aims to take full advantage of the opportunities that a strong national economic environment offers. “We hope the COVID-19 pandemic would be controlled by 2021 so that further adverse effects could be avoided… We are optimistic about the future and look forward to joining hands with all our stakeholders as continue our journey of continuous improvement, adding value, diversifying and expanding our Group, ”the Chairman asked. To comply with national COVID-19 guidelines, DDL has developed a hybrid format, approved by the High Court, to enable a 40 per cent physical presence at the forthcoming AGM while the other shareholders can virtually join.