Increased sales result in $4.2B profit for Banks DIH
Increased sales and reduced expenses have resulted in a whopping $4.2 billion profit for beverage giant, Banks DIH Limited.
This profit after tax was achieved despite the financial year being a challenging one for the public company which, in its annual report, highlighted a number of challenges including what it considers the “artificial increase” in the foreign exchange rates.
Banks DIH Limited, one of the leading beverage manufacturers in the country, has recorded a profit after tax of $4.2B for the year 2017, a decrease of approximately $4M when compared to the year 2016.
According to the Chairman’s Report, the slight decrease is partially because the company benefited from a one-off gain in 2016 when it disposed of some investment securities and the dissolution of its associated company, Banks Holding Limited in Barbados.
The Chairman, Clifford Reis, said the value of shares also increased by 8%, meaning shareholders would have received higher dividends.
He said the improved results were made possible as a result of increased sales of its malt products, aerated and liquor beverages and food products.
Reis said the company also benefited from the reduction in process paid for several key raw materials and packaging materials.
Regarding the challenges, the beverage firm faced, the Chairman said it weathered the effects of an artificial increase in foreign exchange rates.
Reis said this surge affected the acquisition costs for raw and packaging materials, plant and machinery spares. Banks and cambios were last year accused of hoarding foreign currency which resulted in a lower value of the domestic dollar and ultimately higher exchange rates.
The situation became so grave that the Finance Minister sounded a warning to those involved in the practice and began to take steps to stabilize the exchange rate.
Apart from the exchange rates, Banks DIH said the introduction of an environmental levy of $10 per container on all nonreturnable containers resulted in reduced consumer demand.
Moving forward, the Chairman said the company will have to examine areas to diversify the business portfolio in order to survive the uncertain global and local economic environment.