Banks DIH Ltd has recorded an overall profit of $1.838 billion for the financial year which ended on September 30, 2009 — a figure which has been significantly boosted by a write-back of $474 million due to a favourable settlement of an excise tax issue between the company and the Guyana Revenue Authority (GRA).
Yesterday, the company held its 54th Annual General Meeting at its Thirst Park headquarters.
Chairman and Managing Director Clifford Reis said yesterday that the overall profit achieved by Banks DIH represents an increase of $418 million or 29.4 per cent over the $1.420 billion the company recorded the previous year.
The company achieved a net profit of $1.121 billion as compared to $850 billion recorded in 2008. Reis said that this was the first time the company’s net profit exceeded $1billion.
In his report, Reis stated that the Banks DIH Group recorded a profit before tax of $2.345 billion. Last year, the group recorded a before tax profit of $1.968 million, which was $377 million less than what was achieved this year. The group consists of Banks DIH Limited, Citizens Bank and Caribanks Shipping Company Ltd.
The profit after tax for the group that is attributable to shareholders is $1.286 billion, which reflects a 23.4 per cent increase or $244 million on results for 2008. According to Reis, the group’s turnover net of taxes for the year was $14.325 billion as against $13.250 billion in 2008, an increase of $1.075 billion or 8.1 per cent.
Meanwhile, explaining the $474 million favourable settlement with the GRA, Reis said “the Excise Tax liability provided for within the Accounts since January 2007 was resolved” and “it was agreed to accept an adjusted chargeable value as the basis for determining Excise Tax payable. Accordingly, the provision made was reversed to income in September 2009.”
The notes to the financial statements said “the company was awaiting confirmation from the GRA of the appropriate basis for determining chargeable value on which excise tax is to be determined.” The note further stated that since January 1, 2007, “the company had based its excise tax payments on the selling prices for alcoholic beverages reduced for estimated selling expenses. It however fully provided for the additional excise tax that would have arisen had the selling prices for alcohol beverages not been reduced as described.
“During the current year, the GRA agreed with the company’s approach to excise tax determination and the provision was reversed to income.”
Speaking about the company’s performance during its last financial year, the Chairman pointed out that the company “continued to derive very substantial savings from its independent power generation system.”
Banks DIH also recorded higher physical sales (both local and export) during the year when compared to the previous year.
The Chairman pledged significant investments in plant and equipment including expanding the output of its PET line, as the company moves to phase out the soft drinks glass line in 2010. Reis said too that the bottle washer in the Beer Bottling Plant will be replaced with technology which will give the company a greater degree of flexibility to produce a wider variety of malt related products. According to him, the company’s “contractual agreement with Coca-cola will require in 2010, a capital investment in a Waste Water Treatment Plant, which is budgeted to cost $200 million.
According to the financial statements the company recorded total revenue on food and beverages of $14.1 billion for the year. The profit before taxation on these commodities amounted to $1.8 billion. During the previous year, total revenue on food and beverages was $13.5 billion, which represents $661,473,000 less than that recorded for last year. The profit before taxation amounted to $1.3 billion, which represents $422,928,000 less than what was recorded in 2009.
Meanwhile, according to the directors’ report the group’s third party revenue increased from $15.187 billion to $15.994 billion, an increase of $807 million or 5.3 per cent.
The report said the group’s spending on capital works amounted to $878 billion. For 2010, the authorized capital spending is $1.399 billion; $1.272 billion of which relates to Banks DIH Ltd. This would be for the installation of the Waste Water Treatment Plant and a Krones Bottle Washer.
The directors stated that the sum of $1.286 billion has been transferred as profit retained, resulting in the reserves at the end of the year amounting to $13.775 billion.
However, Citizens Bank Guyana Inc, a 51 per cent owned subsidiary of the group, experienced disappointing returns during the year. It achieved an after tax profit of $390.8 million compared to $437.7 million in 2008, a decrease of a $46.9 million.
The decline in profit was due to the sum of $170.2 million being classified as impaired loss arising from overseas investments. The suggestion is that were it not for this loss, the net profit for the bank would have exceeded the profit achieved in 2008.
