DDL after-tax profit at $1.56B

…up by 19%

In the final year under long-serving Chairman Dr Yesu Persaud, the Dem-erara Distillers Limited (DDL) Group registered a 19% increase in after-tax profit and a growth of turnover by 11%.

Its annual report for 2013 said that the group’s profit before tax  rose by 15% from $1.912B  in 2012 to $2.205B last year. It said this reflected better margins from cost reduction initiatives and efficiencies. As a result, the group’s after tax profit grew from $1.314B  in 2012 to $1.569B last year.

DDL’s Annual General Meeting is set for April 25 at Plantation Diamond and among the agenda items is the declaration of a final dividend of $0.43 cents. If approved this would bring the total for the year to $0.58. In 2012, a total dividend of $0.52 was paid.

In the Chairman’s report, Komal Samaroo  noted the retirement of Persaud at the end of last year after 37 years in the position and paid tribute to him.

“Dr Persaud’s vision, tenacity, and capacity for calculated risk taking has made the company one of the leading private sector entities in Guyana. The Chairman, the Board and the Shareholders of Dem-erara Distillers Limited owe Dr Yesu Persaud a profound debt of thanks for his great contribution and decisive leadership over those many years”, Samaroo said.

The DDL company itself registered before tax profit of $1.462B in 2013 compared to $1.282B in 2012.

Samaroo in his report disclosed that $1.3B has been budgeted this year for further modernization. Work will continue on the wharf facilities of the shipping operations in addition to better storage facilities and replacement of key production equipment. In 2013, the group spent $854M to upgrade key machinery and equipment. This included a new Sidel Blow Molding Machine and a new chilling and filtration unit. Six new freightliner trucks were also purchased.

In terms of its subsidiaries, the annual report said that Demerara Shipp-ing Company Limited saw its profit before tax rise from $146M to $185M. Profit for Distribution Services Limited however declined to $455M compared to $490M. Samaroo said “This reduction reflects the challenges facing the distribution division of the company by parallel trading of some of the major brands it represents”.

The Chairman said that Tropical Orchards Product Company Ltd continues to show better results with the company achieving profit before tax of $20.9M for 2013 compared to $16.2M in the previous year. Last year, DDL introduced the line of TOPCO Quenchers and said these products have been well received.

The company’s long-running but troubled joint venture agreement in India came to an end in 2013 and Samaroo said that the group decided not to renew it. With India reducing import tariffs  on alcohol, DDL will focus on building its brand in the top end of the spirits market.

According to the report, the group’s subsidiary in St Kitts had a very good year as it recorded profit before tax of $54.4M versus $22M in 2012. Demerara Distillers (USA) Inc saw growth in before tax profit from $32.6M to $36.1M.

While its European operations have seen a growth in bottled products, Samaroo said that it was affected by delayed shipments as a result of the unavailability of specialized bulk vessels. This led to a shortfall in sales of around 3.3M litres of pure alcohol. This amount remained as stock in transit at the end of the year. The company’s profit before tax was $122M last year compared to $143M in 2012.

In relation to National Rums of Jamaica, Samaroo’s report said that the group’s share pf profit before tax was $93M last year compared to $46M in 2012.

Selling and distribution expenses for the group rose from $1.7B in 2012 to $2.05B last year and administration expenses were also up from $1.73B in 2012 to $2B last year.