Declaring 2023 a successful year of growth albeit the challenges, the Demerara Distillers Limited has reported after tax profits of nearly $6 billion; 12%higher than 2022.
“The group’s profit before taxation for the year was $7.674 billion compared to $7.086 billion in 2022. This represents an increase of $588 million or just over 8% above the previous year. Profit after taxation for the year was $5.969 billion, an increase of 12% or $648 million over the previous year’s $5.321 billion,” the company stated in its annual report sent to shareholders.
DDL shared that the group’s turnover for the year was approximately $33.3 billion and this represented an increase of $1.9 billion or 6% over the comparative 2022 turnover of $31.4 billion
International revenue in the year, the company said, grew 3% over that of the previous year despite the challenges faced. In addition, domestic revenue increased by 7% over that of the previous year.
“The diversification of the group and the continued premiumization of its core brands contributed to this growth,” the company said.
The earnings per share for the year 2023 was $7.75 compared to $6.91 in the previous year.
DDL said that shareholders’ equity at the end of the year was $53.353 billion, reflecting an increase of approximately 5% on the amount at the end of 2022 when it was $50.934 billion.
And as it relates to dividends, an interim dividend of $0.40 per share was paid to shareholders in December 2023.
However, the directors have recommended a final dividend of $1.60 per share, which, “if approved by shareholders at the upcoming Annual General Meeting, will result in a total dividend of $2 per share. In the previous year, dividend payments totalled $1.75 per share,” the report stated.
“The dividend paid and proposed for the year will, if approved, result in an appropriation of $1.54 billion or 26 percent from the profit of the group for the year. In the preceding year, dividends paid required an appropriation of $1.3475 billion,” it added.
In November last year, the company announced that it had declared an interim dividend of $0.40 per share free of company taxes in respect of the year 2023. The dividends should have been paid on December 11, 2023, to those shareholders whose names are on the register of members at the time of closure of the register.
In relation to capital expenditure for 2023, DDL said that the group recorded its highest level “… in any year, as it focused on investments which will expand capacity and modernise its operations, as well as allow for greater product and service diversity, and will ultimately grow and sustain revenue within the group.”
Of the over $8.4 billion in capital expenditure for the year, DDL said that almost two-thirds, “was from funds generated by the group, and the balance was funded by a loan from IDB Invest.”
The largest investment being pursued has been the major expansion of the group’s beverage plant, which is expected to cost around $10 billion, expended over three years (2022- 2025) of implementation. When completed, the production capacity of this operation will be almost tripled, providing a wider range of products for both domestic and export markets, the company reasoned.
“During 2023, the following projects were completed – (a) expansion of the storage bond of the Liquor Bottling Plant at a total cost of $430 million. (b) Drainage Enhancement Project at a total cost of $225 million. The major projects in progress at the end of 2023 are as follows – (a) Beverage Plant Expansion, (b) Distillery Service Equipment Replacement. This project is the final phase of the distillery production expansion project which when completed will realize the full productive capacity of the plant, making possible an increase in the installed capacity by 25%,” the report explained.
As regards the World Trade Centre project at High Street, Kingston, Georgetown listed at (c), DDL added that when completed, it will “offer over 25,000 square feet of modern office space, conferencing facilities and other support services. (d) Moblissa Dairy Project to provide fresh milk for the Topco Packaging Plant. When completed, this project will contribute significantly to the reduction in the regional food import bill by producing five million litres of fresh cow’s milk, utilizing the most modern agricultural practices. (e) Upgrading the port facility of Demerara Shipping Co Ltd, Water and Schumaker Street, and Georgetown. The upgrading of this facility will position the company to take advantage of the increased volumes of imports and exports of cargoes as a result of rapid growth in the local economy.”
Noted too was the new warehouse to increase the ageing of rums to support the growth of the brands. “This warehouse will provide space for an additional 28,000 barrels of rum…,” the company said.
Except for the dairy project and beverage plant expansion, which are expected to be completed in 2025, all the other projects are expected to be completed and fully operational before the end of this year.
“These projects are designed to advance the group’s diversification while continuing to build greater competitiveness in its traditional businesses. These investments will position the group to expand its revenue base as it takes advantage of new opportunities…,” the report said.
DDL also boasted that it has been rolling out new products which have all found favour in the markets.
These include four new juice varieties packaged in one litre amounts. And under the Diamond Brand, a new flavoured rum – Diamond Reserve Guava Rum – was launched in October 2023. A special blend under the Eldorado Rum brand was released for the CPL 11th anniversary. In addition, the first in a series of High Ester Blend – LBI/DHE – was launched in August 2023, while the Christmas limited edition Eldorado Caramel Truffles Rum Cream was launched in November 2023.
Sustainability and corporate ethics platforms are also used as tools to monitor, plan, and improve performance for a sustainable future, the company said and these include a Carbon Disclosure Programme, an International Compliance Information Exchange, a Supplier Ethical Data Exchange and a Business Social Compliance Initiative.
With regard to employee job satisfaction, the company said, 2023 saw increased focus on retention, engagement, training and career advancement and staff welfare matters.
Due to the increased demand nationally for both skilled and unskilled employees, new policies have also “been implemented to better engage existing employees while new employees are more carefully inducted and onboarded in their new positions. A new position of Employee Onboarding and Engagement Manager was created to provide focus and leadership in this area,” the company said.
As a result of the disruptions caused by the COVID-19 pandemic and the Russian invasion of Ukraine, global inflation in 2022 averaged 8.7 percent, the company pointed out. Central banks around the world introduced measures, including increasing interest rates, to bring such inflation under control and these measures, according to DDL, “resulted in significant reduction of consumer spending power in 2023 which adversely affected the global spirits market.”
As such, “businesses realigned their operations to this new reality by cancelling orders, or deferring shipments by postponing deliveries to the next year. Inflation in 2023 reduced gradually to end the year at an annual average of 6.8 percent. Spirits sales saw declines in most major markets in 2023, while all markets showed significant decline in volumes sold in the high-end premium segments of the market. The Guyana economy, on the other hand, continued to record steady growth. In 2023, Guyana’s real GDP was estimated to have grown by 33 percent, driven mainly by the oil and gas sector. In the non-oil sector, real GDP growth was estimated at 11.7 percent, driven mainly by the construction and service sectors. All other sub-sectors of the economy, including agriculture and manufacturing also recorded notable growth in 2023,” the report stated.
