Banks DIH profits soar despite COVID setbacks

May 26, 2022 News

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…announces $340M in dividends to shareholders

By Gary Eleazar

Kaieteur News – Despite the numerous setbacks, particularly trade and commodity costs attributed to the COVID-19 Pandemic, local beverage giant Ban’s DIH Limited continues to see its profit soar year after year.

This much is evident from the Chairman of the Board of Director’s, Clifford Reis’ report to shareholders when the company yesterday made public its interim financial statements for the half year ended March 31, 2022. Reis in his report noted that the group’s third part revenue for the six-month period amounted to some $21.9B compared to the $19.8B that was realised for the corresponding period in 2021. According to the company chairman that amount reflects a 10.7 percent increase in revenue some $2.1B more than the previous year.
As it relates to the unaudited profit before taxation for the group, it was reported that this amounted to some $4.8B as compared to the $4B realized for the same period in the preceding year representing an increase of some 19.6 percent.
Revenue generated by the company, according to Reis was $19.6B when compared with the $17.8B had for the same period last year an increase of some 9.5 percent. Reporting on the unaudited operating profit before taxation for the company was pegged at $3.6B which works out to a more than 11 percent increase.

Profit after tax, according to the company’s chairman, is $2.5B compared to the $2.2B in the corresponding period for the previous year representing a more than 11 percent increase in profit. According to Reis, it was the mitigation of the effects of the COVID-19 pandemic which assisted the group of companies to cope with the “many challenges” that had arisen.
He did however state that the “supply chain will continue to be disrupted as a result of the geopolitical crisis in Europe.”

According to Reis, the prices of key raw material and supplies will continue to rise which “will affect our profitability” but expressed confidence nonetheless saying “we are confident that we will rise above the challenges ahead and will report improved results in the second half of 2022.” Elaborating on the company’s operations and performance thus far for the year, Reis highlighted that they managed to deliver enhanced results in the first half of the year due to revenue growth derived from the increase in physical sales of its beverages and food products.
He said too that revenue from the restaurant operations as well as efficiency “from our production capabilities and management of our operational expenses” also contributed to the company’s financial performance this year.

Seeking to provide a clearer breakdown, the Banks DIH Chairman reported increased performances by subsidiaries and companies for which the company holds a controlling interest.
To this end, he pointed to Banks Automotive and Services Inc., a 100 percent owned subsidiary, which generated a 31 percent increase in its revenue to the tune of $25.8M compared to the corresponding period in the preceding fiscal year, which saw $19.5M in revenue being realized.
As it relates to Citizen’s Bank, a 51 percent owned company, Reis reported that the financial institution ended the fiscal period recording an unaudited profit after taxation of $722M compared to the $478.4M achieved in 2021, representing a 51 percent increase over the corresponding period. He did note the remaining six months of the group of companies’ fiscal year, will not be without its challenges for the Bank but “we are however optimistic that our strategies will result in increased shareholder Value.” To this end, the Chairman reported that the Directors have since approved an interim dividend of $0.40 per share unit to all shareholders whose name appears on the share register as at 17th May 2022.

As such, the cost of the dividend payment, according to Reis, will cost some $340M.
Providing further updates on the entity’s operations, Reis reported that a Distribution Agreement was signed between Diageo Brands BV, R&A Bailey and Banks DIH Limited giving “our company the sole right to distribute “Johnny Walker Scotch Whiskey, Ciroc Vodkas, Zacapa Centenario Rums and Baileys Liqueur.”
Accounting for some of the capital expenditure undertaken by the company for the period under review, Reis pointed to the acquisition of new trucks, display coolers, freezers and draught beer cylinders among other acquisitions.
He noted too that there was also the replacement of equipment across the company, which included power generation, refrigeration, security cameras and computer equipment.
According to Reis, during the second half of the fiscal year, work will continue on the Syrup Room upgrade, the new water bottling plant, the new malt and rice mill as well as a new centrifuge system for the brewery.

 

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