One of Barbados’ leading rum producers is reflecting on another sobering financial year.
As it and others in the industry here worry over the potentially crippling outcome of a battle against American rum subsidies, The West Indies Rum Distillery Limited has revealed that it lost almost $2 million in 2012.
This was despite increased sales and represents its second straight year of financial losses.
And while Chairman John Taylor and Managing Director Andrew Hassell said this was an improvement over last year’s $2.6 million loss, the performance for the financial year ended September 30, 2012 still means that shareholders will be receiving no dividends this time around.
In a statement accompany their consolidated financial highlights just released, the officials said the acquisition of a previous competitor impacted on its performance, including causing assets to decline.
“During the financial year (WIRD) acquired 75 per cent of International Brand Developers N.V., owners of the Cockspur Rum brand formerly owned by Hanschell Inniss Holdings (Curacao) N.V. The combined operations recorded a 14.8 per cent increase in sales to $42.6 (million) for the period, up from $37.1 (million) in 2011,” the officials stated.
“The loss from operations of $1.7 (million) for the year was an improvement over 2011, when a lost of $2.5 (million) was recorded. Finance costs increased to $473,093 from $202,413, due to the additional borrowing required for operations. The share of income of our associated company, National Rums of Jamaica Ltd, increased to a profit of $240,201 from a loss of $116,494 in 2011.
Noting the overall near $2 million financial loss this year equated to a 71.4 per cent loss per share, WIRD said its working capital dropped from $13.3 million to $6.8 million, the result of reduced funds due to group companies and other increased costs due mainly to the IBD integration.
“The acquisition of IBD created an intangible asset of $5.3 (million). These changes, as well as losses incurred, meant that net assets declined to $28.9 (million) from $31.2 (million) at the end of 2011,” the reported noted.
But in spite the challenges, both the chairman and managing director were hopeful of improvements next year.
“Despite the very challenging environment internationally, sales of all WIRD products continue to grow, and in addition, cost savings are being made through better operating efficiencies. We fully expect this business to achieve an improved resultin 2013,” they stated. (SC)