Angostura Holdings Ltd has reported a 20.2 per cent increase in profit before tax (PBT) for the six-month period ended June 30, 2021 when compared to the same period in 2020.
In its unaudited summary consolidated financial statements, the company said PBT of $74 million was driven by three main factors: an improvement in gross profit margins, an improvement in credit outlook in international markets, and an increase in the return on investment of surplus funds.
It noted that owing to improvement in the efficiency of the waste water treatment facility, Gross Profit margins increased to 48 per cent from 46 per cent as distillery alcohol production normalised in 2021 compared to 2020.
However, the Group said it has faced more severe revenue challenges in the local market this year compared to the first year of the pandemic (2020) as rising COVID-19 cases directly impacted its staff and hurt production.
It also added that an improvement in international markets, both in terms of revenue and credit outlook, positively impacted the Expected Credit Loss (ECL) Model resulting in a significant write back ($4 million) of this selling expense at June 30, 2021.
In the prior period, the company said COVID-19 in accordance with international accounting standards had an exceptional negative impact on operating margins.
The increase in returns on the investment of surplus funds $2.5 million or 46 per cent further secured growth in profit before tax for the six-month period, Angostura said.
It added that revenue growth over 2020 was mainly driven by recovery in Australasia (Bitters), North America (Bitters), Europe (Bitters and Rum), and the UK (Bitters).
“These markets collectively contributed $43.6 million in revenue growth which was then offset by the contraction in the local market,” the company said.
In consideration of the Group’s performance, the Board has recommended an interim dividend of $0.09 per share.
“As we look forward to the remaining fiscal year, we will continue to drive revenue and focus on maximizing global opportunities while supporting recovery in the local markets.
“While uncertainty and volatility may remain as the world continues to recover from the global pandemic, we are confident that market recovery will rebound in our favour over the remaining half of this fiscal year,” the company added.