Banks DIH after-tax profit up by 14%
Conglomerate Banks DIH saw its profit after tax increase from $3.584 billion in 2017 to $4.085 billion last year, an appreciation of $501 million or 14%.
Profit before tax in 2018 was $6.032 billion compared to $5.079 billion in 2017, an increase of $953.0 million or 18.8%, according to the company’s annual report.
“…the improved results achieved were as a result of the increases in physical case sales of our Malt Products, XM Rums and Banko Wines; our Golden Harvest Bread and baked goods and our Demico and Creme Select ice-creams and Frostee products,” Chairman Clifford Reis said in his Chairman’s report. The company’s Annual General Meeting is set for January 26th at Thirst Park.
“Additionally, benefits were also accrued as a result of efficiencies achieved from raw material conversion and improved production throughput arising from capital expenditure investment over recent years. The improved results were also as a result of lower prices negotiated for several raw and packaging materials as well as from the prudent management of our financial resources,” he added.
He said that the Group’s third party revenue was $30.923 billion when compared with $30.006 billion in 2017, representing an increase of $917 million or 3%. The trading profit from operations for the Group was $6.837 billion when compared with $6.196 billion achieved in 2017, representing an increase of $641 million or 10%.
Profit after tax attributable to the shareholders of the parent company was $4.286 billion compared to $3.888 billion in 2017, an increase of $398.0 million or 10%. Of this, a dividend payment of $892.4 million was made and $3.394 billion was held as retained earnings.
Meanwhile, the Group’s net asset value per share increased from $34.33 to $40.15 by 16.9%. The Board of Directors of the company has recommended a dividend proposal of $1.10 per share unit, resulting in an overall cost of $934.8 million, Reis disclosed.
He said that revenue generated by the company was $27.863 billion compared to $26.548 billion in 2017, an increase of $1.315 billion or 5%.
He noted that the introduction of an Environmental Levy of $10 per unit for all PET and returnable glass containers was gazetted during the last financial year and affected the selling prices and therefore the affordability of the company’s soft drinks and bottled water products.
In terms of capital expenditure, Reis highlighted that the recapitalisation of the company’s capital base continued during the period under review. “The inclusion of state-of-the-art technology through the medium of plant, machinery and equipment on all of the production plants and in all of the service departments, enabled improved manufacturing and operational efficiencies,” he said.
The new vehicle workshop and truck parking zone were commissioned along with the new offices for the Workshop Administration, Environmental and Safety Departments and the Building and Property Departments, he added. Also included in that development was new PET and plastics chipping equipment for the in-house generated plastics waste while the solar energy expansion programme was continued with the installation of a PV/Solar System at the OMG and Main Street Qik Serv facilities. These departments are now partially powered by solar generated electrical power, Reis added.
Further, he said, a new packaging line was installed on the Trisco Cookie and Cracker Plant and new production equipment was installed in the Dairy and Novelty lce Plant while new trucks and forklifts were purchased for the company’s distribution fleet.
For 2018, the company’s capital spending amounted to $3.327 billion while the capital spending authorised for 2019 is $3.498 billion.
In the new year, the capital expenditure thrust will be focused on increasing potable water storage capacity, the addition of increased fermentation and storage capacity for the Winery and the installation of a new CIP system for the bottled water plant. He said that a project to transition to solar power across the company will be continued while construction of a new multi-story car parking facility at the Demerara Park area, will begin.
As it relates to Citizens Bank Guyana Inc, a 51% owned subsidiary of Banks DIH, revenue for last year was $3.160 billion. The profit before tax was $1.009 billion and the profit after tax was $602.3 million. Net interest income was $2.24 billion. The earnings per share was $10.12 while the total assets base was $50.5 billion. Loan assets decreased from $28.2 billion to $25.5 billion in 2018 and customer deposits were $40.9 billion compared to $40.6 billion in 2017, Reis reported.
According to Reis, within the recently concluded financial year, the company examined and evaluated new business models which are compatible with their existing business model to create wealth and value for shareholders. “These new business models will bring into our existing business portfolio, a new generation of products and services which will foster job creation and added value,” he said.
In terms of the future outlook, he said that the company’s commitment to innovative technology, leadership in the solar energy sector, the pursuit of market extensions internationally and impending diversification programmes will enable better results. The company’s reserve at 30 September 2018 stood at $32.114 billion.