-company bracing for challenges in second half of the year, amidst COVID-19

THE Banks DIH group has raked in a profit of $3.48B for the first half of the financial year, despite the prevailing conditions created by the novel coronavirus disease (COVID-19) and a protracted electoral process, which is still incomplete.

Chairman of the Banks DIH, Clifford Reis, in a statement published in the company’s interim financial report, said the group’s unaudited profit before taxation for six months (March 31, 2020) was $3.48B as compared to $2.98B in 2019, an increase of $498M or 16.7 per cent.

He said the group’s third party revenue for the six-month period was $18.10B compared to $16.73B for the corresponding period in 2019, an increase of $1.37B or 8.2 per cent
In a breakdown of how the revenue was generated by group’s subsidiaries, Reis said Banks DIH Limited raked in $16.21B in revenue compared to $15.11B in 2019, an increase of, $1.10B or 7.3 per cent.

The unaudited operating profit before taxation for Banks DIH Limited was $2.79B compared $2.45B in 2019, an increase of $340M or 13.9 per cent, while the unaudited profit after taxation was $1.98B compared to $1.68B in 2019, an increase of $305M or 18.2 per cent.
Citizens Bank Guyana Inc., a 51 per cent owned subsidiary of the company, recorded an unaudited profit after taxation for the period ended March 31, 2020, of $452.1M compared to $357.5M achieved in 2019, an increase of $94.6M or 26.5 per cent.

“The banking subsidiary will leverage its strengthening banking relationships and technology infrastructure to meet the needs of its customers. There is cautious optimism that the bank will continue to improve its performance in the second half of the year,” said Reis.

In speaking about the group’s performance, he said the half-year performance was enhanced by the increased demand for the company’s beverage and food products, and the “excellent” distribution and delivery systems, as well as the continued benefits derived from internal efficiencies.

During the period under review, the company’s capital expenditure was focused on the completion of the new state-of-the-art cracker/cookie plant and equipment, refrigerated storage facilities, upgrades of water plants, and overhaul of the soft drinks plant production facilities.

Also, expenditure was incurred in upgrades to the company’s information system network, computerised maintenance management system and fire suppressant systems for the power generation department and the new vehicle workshop. Reis said work also continued on the elevated car parking facilities and the acquisition of new trucks and forklifts.
As a result of the company’s performance, the directors have approved an interim dividend of $0.30 per share unit to all shareholders whose names appear on the share register as at May 18, 2020. The cost of this dividend payment will be $255M.

Despite the successes recorded in the past six months, the group is anticipating new challenges, which may arise as a result of the COVID-19 pandemic and the protracted electoral process.

“…the second half year will pose many new challenges which will include the disruption of the supply chain, consequential shifting of consumer demand and additional initiatives in the way the company and its employees operate,” said Reis.
The implications of social distancing may become an aspect of daily life which will impact the way society operates in the future. These changes will impact the ways in which business activities are conducted in the foreseeable future.

Despite the imminent changes, Reis said: “We are cautiously optimistic that with measures implemented both at the national level and within the group, we can rise above the challenges and return a good performance for financial year 2020.”

The Guyana Chronicle had reported that as a consequence of the COVID-19 pandemic, the local commercial sector has been dying a “natural death” due of decreased spending and reduced economic activities, but Minister of Business, Haimraj Rajkumar, believes that a change in the business culture could save the sector.

Guyana, like many other countries, has been at the mercy of COVID-19 for about four months, and with no end in sight, new methods of doing business will have to be adopted in order to sustain the economy and ensure that jobs and livelihoods are maintained.
Methods, including changing marketing strategies and channels of distribution, will have to be examined, especially given the existing restrictions and measures, which are geared at reducing the spread of COVID-19. These measures, while necessary, have cost the business sector because operating hours have been adjusted and customers have resorted to “safer” modes of shopping.

“As it is now, we are trying to encourage people to think of ways of carrying on their businesses amidst the pandemic…they need to look carefully at their options and carry on their business in a safe manner,” said Minister Rajkumar. Considering the prevailing situation, he said businesses need to examine new, innovative ways of marketing their business and distributing their stock. These initiatives would be more applicable to retail businesses, which rely on daily sales to sustain their operations.

The Ministry of Business has been encouraging retailers to focus on online marketing and the utilisation of social media to sell their products/goods. “This will eliminate face-to-face interaction and will help businesses to reach their customers in a safer way… we know businesses have their fixed costs to meet, so I believe this will be one way of ensuring that they sustain their businesses,” said Minister Rajkumar.