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Business News of Monday, 19 November 2012

Source: B&FT

GIHOC’s pre-tax profit jumps 86.2%

GIHOC Distilleries Company has announced an 86.2% increase in profit before tax from GH¢1.6million in 2010 to GH¢3million in 2011.

The company said its total production of alcoholic beverages was 5.88 million litres in 2011, as against 5.32 million litres in 2010.

Board Chairman Dr. Kwame Asante disclosed this during a presentation of the 2011 annual report and financial statements in Accra.

He said sales revenue increased from GH¢23.5million in 2010 to almost GH¢26million in 2011, representing an increase of 10 percent -- adding that the increase was more the result of growth in volume as against changes in product pricing.

He said the board of the company has recommended the payment of a dividend of GH¢0.25m to the government, which is the sole shareholder, for the year ended December 2011; and that they hope to complete the upgrade of the factory in time to propel the company into an accelerated profitability regime.

He added that the performance of the company demonstrates its ability to deliver substantial value to its shareholders and the market.

For her part, the Managing Director Kay Kwao-Simmonds explained that the company operates in a fairly stable environment with local inflation gradually reducing; however, she stated that the cost of most of the company’s raw materials, which are imported, continue to rise.

She said the prospects for the future are bright with the country’s economy expected to grow by an annual average of 8%, local inflation kept below 10%, and the prospect of reducing interest rates.

“We expect a buoyant economy with increased spending on social activities. Also, with the completion of the five-year strategic plan project in sight and the planned flooding of the market with our products, revenue is expected to increase.

“Moreover, the modernisation and retooling of the factory is expected to bring down direct operational costs, which will go a long way to reduce production costs and increase profit before tax.”

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