Goddard Enterprises records profits following cocoa business turnaround

Goddard Enterprises Limited (GEL) reported a major increase in profits last year, helped by a strong recovery at its cocoa processing business in Ecuador after heavy losses the year before.

The Barbados-based conglomerate earned $76.8 million in profit for the year ended September 30, up $24.3 million from the previous year. Earnings per share rose to 27.9 cents, and shareholders will receive a final dividend of three cents per share at the end of February.

Chairman Charles Herbert and managing director Anthony Ali said the improved results were driven mainly by better performance in manufacturing.

Charles Herbert, chairman of Goddards.

“Goddard Enterprises Limited recorded net income of $76.8 million, compared to $52.5 million in the previous year,” they said.

The biggest change came from Ecuador Kakao Processing Proecuakao S.A. (Ecuakao), which moved from a large loss to a healthy profit.

The cocoa processor earned $16.7 million after losing $21.2 million the year before.

“This turnaround in Ecuakao’s performance” was the main reason the manufacturing division returned to profit,” Herbert and Ali said.

They explained that higher cocoa production and sales, along with better prices for raw cocoa beans, helped boost margins.

“The company benefitted from increased production and sales volume, along with a higher gross margin,” they said.

Still, the recovery came with costs. The company spent $8.5 million on financial protection related to cocoa futures and set aside $4.1 million for money owed by a customer that may not be recovered.

Another strong contributor was Acado Limited, the group’s consumer products joint venture with Trinidad and Tobago’s Agostini Limited.

“Acado had a solid year and once again stood out as one of the top contributors to our group’s performance,” the directors said.

Most of Acado’s markets performed well, though St Lucia faced operational issues.

The Goddard Catering Group recorded good revenues, but profits were reduced by losses at associate companies in Costa Rica, the directors explained.

“GCG recorded ECL provisions totalling $10.8 million for amounts due from two of its associates,” Herbert and Ali said.

The group also wrote down $5.4 million in goodwill tied to its Panama catering business, which has been struggling with increased competition at the country’s main international airport.

Its building supplies division grew revenue by 8.5 per cent and kept operating profits in line with last year. However, higher interest and tax costs reduced overall profit from that segment.

However, the automotive division had a difficult year, with weak vehicle sales in Barbados and Jamaica. 

“The automotive division faced a challenging year,” the directors said, pointing to lower sales, efforts to reduce excess inventory, higher financing costs linked to the launch of the GAC brand, and a $1.3 million loss from the revaluation of property in Barbados.

Shipping and services, the group’s smaller division, performed in line with expectations, according to the top company officials.

(IMC)