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DEMTOCO reports robust growth despite illicit trade threat, share price increase by 50%
Kaieteur News – Demerara Tobacco Company Limited (DEMTOCO) recently announced a strong operational performance for the second consecutive year achieving 3.6% volume growth compared to the previous year.
Managing Director of DEMTOCO, Vijay Singh
According to a press statement, the company’s revenue growth increased by 5.8% to $7.7 billion, which is mainly driven by improvements to portfolio mix and volume increases, resulting in a 2.5% increase in earnings per share.
The Managing Director of the company, Vijay Singh, at the company’s 89th Annual General Meeting highlighted that “share price at the close of the financial year stood proudly at $3,000 representing a 50% increase, which solidifies the confidence of our shareholders and commitment of management to deliver on expectations.”
Singh in his report stated that the threat of illicit trade is the greatest risk to their business and the wider business community. The company believes that the rapid increase and far-reaching presence of illegal cigarettes will negatively impact their business, government revenues and further incentivize criminal activities in the communities.
He noted that if things continue as they are, the company stands to see this illegal trade grow by a further 10% by 2024, which will be at unmanageable levels in the market. The company has seen a similar situation play out in neighbouring Suriname, in which, the trade, left unchecked, and ruined the revenue streams for the government and the legitimate industry.
In Guyana, DEMTOCO has been receiving support from the various law enforcement agencies and this is noteworthy. However, the Managing Director stated that much more has to be done and at an accelerated and urgent pace as the illicit traders are increasing their market share on a daily basis. He said the company remains committed to raising awareness of this issue through active engagement with regulators, government, and the private sector.
Despite the challenges posed by the illicit trade, the company’s premium brand Dunhill grew significantly by 11%, driven by continuous innovation that the brand offers which consumers embraced and its Pall Mall brand experienced a 7% growth.
Demerara Tobacco Company’s Managing Director urged shareholders to highlight this plight to ensure public awareness is at its peak. The company remains committed to ensuring sustainable growth through continuous improvements in their portfolio, distribution, and retention of the best talent in the market.
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