Demerara Distillers Limited (DDL) recorded a Group Profit before Tax of $4.362B for 2018. This was announced by the company’s President and Chairman of the Board, Komal Samaroo during its 67th Annual General Meeting (AGM) of Shareholders on Friday last, at its Diamond Complex, on the East Bank of Demerara.
The Group Profit DDL amassed resulted in an increase of $811M over the previous year.
Samaroo told shareholders that DDL recorded its highest revenue ever in 2018, at $21.862B–a $2.293B (12 percent) increase on the total revenue of $19.569B recorded in the previous year. The earnings per share increased from the previous $3.38 to $4.26.
He also revealed that the year’s total capital expenditure of $2.187 was incurred entirely by self-generated funds. Additionally, bank borrowing (loans and overdraft) was reduced by $1.437B from funds the Group generated in the year.
The Chairman said that in 2018, attention was drawn to archaic regulations governing the spirits industry in the region, as opposed to what the company considers more appropriate regulations in the modern world.
As a result, DDL has sent representatives to advocate for the company’s interests at policymaking levels, with the hope of modernizing Guyana’s regulatory framework. Without this, Samaroo said that the company would not be able to compete fairly with local and international competitors.
Despite the profits earned by the company last year, it was noted that the downsizing of the sugar industry by the government negatively impacted the company’s operations. Therefore, it imported 14,000 tons of molasses with an attendant high logistics cost.
A new central distribution warehouse was commissioned earlier this month for DDL’s subsidiary, Distribution Services Limited (DSL), at Plantation Great Diamond for its wholesale business. The project reportedly cost DDL over $1B.
DDL’s other subsidiary, Demerara Shipping Company Limited (DSCL), has embarked on a programme to rehabilitate and modernize its office and port facilities. It expended $40M in 2018 for this endeavour. Some $940M is projected for capital upgrades this year.
The subsidiary, Demerara Rum Company, will be liquidated this year, due to “significant consolidation of the customer base for its bulk products,” according to the Chairman.
To diversify, Samaroo said that the company will focus on expanding the operations of Tropical Orchard Products Company Limited (TOPCO).
“The first phase of the project is to expand and automate the extraction of pulp from local fruits,” he said, “[and] the second phase of the project entails the expansion and modernization of the packaging facility for the TOPCO range of juices.”
DDL expects to complete a $465M blending plant in June. The plant is meant to use modern technology to save costs and improve operational efficiency.
Samaroo assured that the company’s operations would be much more diversified in 2019, due to the commissioning of the new warehouse and the expansion of TOPCO’s production capacity.
He said that although there are other areas of diversification being considered, those will be made known after the feasibility is completed.
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