BARBADOS’ LARGEST BEVERAGE CONGLOMERATE Banks Holdings Limited (BHL) recorded a $1.1 million decline in profit for the 2012 financial year despite export growth and improved operational performance.
But it has seen significant improvement in results for the first three months of the 2013 financial year.
That’s according to statements recently published by the company.
The summary consolidated financial statements for the year ended August 31, 2012 show that net income for the year declined from $7.3 million to $6.2 million and earnings per share from 13 cents to 11 cents.
The results also point to a marginal decrease in revenue to $176.6 million from $177.3 million as the recession in the local market continued.
Chairman G. Anthony King and chief executive officer Richard Cozier said growth in exports was achieved with the entry of Banks Beer into the British market and the launch of Banks Beer in cans in the Guyana market through BHL’s associate Banks DIH Limited.
“Notwithstanding the reduced revenues, we recorded an improvement in operational performance despite bearing the added costs of operating two brewery plants during the transition to the new brewery for part of the year.
“However, restructuring costs and impairment expenses increased over last year as we completed the changeover in our production facilities, and interest costs increased with the commissioning of the new brewery facility,” the directors said.
They noted that results from associates improved, led by another strong performance by Citrus Products of Belize Limited (CPBL) together with another record performance by Banks DIH which continues to benefit from strong growth in Guyana’s economy.
“During the year the group adopted the policy of depreciating its freehold building and as a result the comparative statements for 2011 and 2010 have been restated to conform to the changed policy.
“The sale of the Wildey site is being pursued and the proceeds are earmarked to reduce our borrowings and hence interest costs,” King and Cozier said.
The directors noted that although significant growth in the local economy was not anticipated for the 2012/13 financial year, with the plant upgrades and commissioning of the new brewery completed, the benefits of these investments were now being realized and results for the new financial year from local operations were expected to be markedly better.
Based on a summary consolidated statement of income for the quarter ended November 30, 2012, BHL has already seen some improvements.
Net income for the period amounted to $1.7 million, up from a $239 000 loss in the first quarter of the previous year.
The directors’ statement noted that whereas the $44.8 million revenue was essentially the same in both years, profit from operations grew by $1.3 million to $2.5 million since reduced costs from the company’s new production facilities were now being realized.
The directors projected that local operations would continue performing at improved levels for the remainder of the year.
Meanwhile, the share of income from associates declined from $346 000 to $46 000 due to the results of CPBL.
“While CPBL normally reports a deficit in the first quarter, the significant reductions in concentrate commodity prices this year have increased their losses.
“Whilst this trend in pricing is likely to continue for some time, that operation is still expected to be profitable for the financial year,” King and Cozier said.
They noted that profits from other associates were at improved levels over the previous year. (NB)