Banks DIH af­ter-tax profit up by 14%

Stabroek News - - News -

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.

Clif­ford Reis

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