-warns of significant losses due to smuggling
The Demerara Tobacco Company Limited (DEMTOCO) has announced an after-tax profit of $2.27 billion for 2023 while noting a “significant” rise in cigarette smuggling which it estimates could cost the local economy some $1 billion annually.
This disclosure was made yesterday at the company’s 90th Annual General Meeting (AGM) which was held at the Marriott Hotel in Kings-ton, Georgetown, where it shared its 2023 results and strategic achievements under the leadership of Managing Director, Vijay Singh, a DEMTOCO release disclosed.
The company reported a 9.7% increase in After Tax Profit, climbing from $2.07 billion in 2022 to $2.27 billion in 2023. This growth, it stated, has been supported by a 4.4% increase in revenue which is driven by enhanced operating efficiencies. These results however, were achieved amidst a challenging global environment characterised by logistical disruptions, inflationary pressures, and international political tensions, which DEMTOCO successfully navigated in order to deliver significant value to its shareholders.
Singh in his remarks at the AGM, highlighted the company’s strategic focus on strengthening its portfolio of international brands. “Our premium brand Dunhill, has once again shown outstanding performance, with a growth of 9.5% for the third consecutive year. This is a testament to our commitment to innovation and providing a premium experience to our consumers.” He also pointed out that the migration of the Bristol brand to the globally recognized Lucky Strike, has positioned DEMTOCO to leverage brand strength and drive future growth.
The Managing Director also addressed the challenges posed by the illicit trade of tobacco products, which has significantly impacted the industry, informing that the market share of illicit cigarettes in Guyana has risen alarmingly to an estimated 29%, representing a 100% increase in just one year. As such, he emphasised the urgent need for intervention, noting, “If this trend continues, we could see an estimated loss of G$1 billion in government revenue by the end of 2024.”
According to the release, DEMTOCO has been proactive in advocating for stronger enforcement to combat the issue of illicit trade, which undermines legitimate businesses and poses risks to the economy. The company expressed it appreciation of the efforts of law enforcement agencies such as the Guyana Revenue Authority and the Guyana National Bureau of Standards in seizing illegal products and called for increased collaboration to tackle what it termed “this pressing issue.”
The company stated that despite these challenges, its “resilience and strategic initiatives” have ensured sustained growth and shareholder value. Meanwhile, Singh extended his gratitude to all stakeholders, including the dedicated DEMTOCO team and the leadership provided by the Board of Directors, which he acknowledged has been instrumental in achieving the company’s goals.
He assured of DEMTOCO’s intention to continue to contribute positively to Guyana’s economy. “As we continue to navigate through these challenging times, our focus remains on innovation, strategic growth, and combating illicit trade to ensure the prosperity of DEMTOCO and contribute positively to Guyana’s economy,” Singh added.
