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Reduced consumer spending blamed for Banks DIH, Citizens Bank half year performance
Dubbed one of the largest beverage companies in Guyana, Banks DIH Limited has attributed its half year performance to reduced consumer spending, increased cost of doing business and maximisation of operational efficiencies.
These reasons were also given for the performance of Citizens Bank Inc. a 51 percent owned subsidiary of Banks DIH. According to a report by the Chairman of the Board of Directors for the beverage company, Clifford Reis, Banks DIH has recorded an unaudited profit before tax for the six months ending March 31, 2017 of $2.54B compared to $4.09B during the same period in 2016.
This was published in yesterday’s newspaper. Reis went on to say that included in the profit before tax for 2016 was a gain of $1.375B which was due to the sale of the company’s holding of Ordinary Shares in Banks Holdings Limited.
The Board Chairman reported that the unaudited operating profit before tax for the parent company was $2.05B compared to $1.95B in 2016. As for the unaudited profit after tax, that was reported to be $1.32B, an increase of $100M when compared to $1.22B in 2016.
As it relates to the performance of Citizens Bank, Reis said that the institution had recorded a profit after tax of $288.7M compared to $440.8M for the same period last year. He added that the Bank’s new branch at Camp Street and South Road which houses the Main Branch and Corporate Office will improve the services offered to customers.
Further, he said that the Capital Expenditure Programme of Banks DIH was limited to investment in critical areas in the long term development aspect of the company. According to Reis, these include initial payments made on a new biscuit packaging line, a new 1.7 Megawatt Power Generating Plant and Water storage tanks.
Looking to the future, Reis said that in the second half of 2017 the company proposes to complete the construction of the new workshop facilities and the modernisation of Demico House facilities.
Banks DIH Chairman, Clifford Reis
Dividends to shareholders for the period passed will amount to $229.5M. This is as a result of the Board of Directors approving an interim dividend of $0.27 per share offered to all shareholders whose names are on the Register as of May 18, 2017.
In 2016, Citizens Bank had recorded a profit of $0.8B before taxation and after taxation, a profit of $0.5B. Reis, at that time had said that the Bank’s performance was a reflection of a slowdown in the economy due to the underperformance by many major productive sectors.
He said that many borrowers were encountering difficulties in meeting their obligations to financial institutions with a resultant increase in non-performing assets.
Reis had reported that the bank’s loan portfolio remained relatively sound. However, the difficulties experienced by its customers because of a decline in business activities during the review period, had impacted the performance of Citizens Bank’s overall portfolio.
Moreover, in January of this year, Reis, reporting on the 2016 performance of Banks DIH, had warned of challenging times ahead for the company in uncertain global conditions. He told shareholders that the continuing international economic uncertainty and changing global weather patterns are projected to have negative macro-economic consequences on Guyana.
He reported that the company would have extended into the North American market introducing a variety of rum, wine and biscuit products to satisfy the cravings of the Guyanese diaspora.
The reduction in consumer spending is however not unique to Banks DIH. In April, this newspaper met with business owners along Regent Street, Georgetown that reported that there is a decline in sales.
As a result, some businesses have been forced to cut working hours of staff, reducing salaries and unfortunately laying off workers. For some entrepreneurs, closing their doors is becoming more of a reality if the trend continues.
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