Demerara Tobacco records $651M after-tax profit
Stabroek News
April 2, 2007
Demerara Tobacco Company Limited reported a net profit after tax of $651 million compared to $572.8 million in 2005, while declaring a dividend of $27.75 per share at its 73rd Annual General Meeting last week at Hotel Tower.
Chairman Patrick Smith reporting on the entity's operation in 2006, said the launch of Pall Mall, a global brand, is strategically positioned to ensure that the market share is maintained in an increasingly competitive environment.
Benson & Hedges, Smith said, a premium international brand, received a complete pack redesign which supported its evolution, bringing modernity and innovation to this "gold standard" product.
He reported that production volumes for the year increased by 3.38% over 2005, while operating profit increased by $181 million or 16.6% when compared with the previous year. Operating expenses were put at $771.9 million. Earnings per share rose by 13.6%, due in part to the volume increase together with a full year of price increase, implemented in December 2005.
Demerara Tobacco's Board declared and paid three interim dividends, totalling $15 per share, with all payments being made to shareholders during the year and a final dividend of $12.75 per share was proposed by the Board and agreed to by shareholders yesterday.
The company contributed 42% of its turnover to the economy in the form of consumption and corporation taxes, the annual report said. The total of these taxes paid in 2006 was $1.5 billion compared to $1.4 billion in 2005. The gross turnover was put at $3.9 billion with the cost of sales at $1.88 billion and gross profit at $2 billion. Profit before taxation was $1.29 billion compared with $1.1 billion in 2005.
Demerara Tobacco's operating costs was 20% of the total gross turnover, an increase of 25% over 2005. Included in the total operating costs were the launch of the new brand Pall Mall and contributions made to charitable organizations.
The gross turnover for the year increased by $530 million or 15.5% resulting from the volume increase and a full year of price increase implemented in December 2005 for the Bristol Variants.
The company's total assets rose to $1.1 billion as against $881.9 million in 2005. In recognition of the rich flora and fauna of Guyana, the company chooses the colour green as the theme of the 2006 Annual report.