At-home drinking which turned home-owners into mixologists during covid19 lockdowns helped the Angostura Group to earn a strong after-tax profit of $145.6 million last year.
This amounts to an increase of 2.1 per cent or $2.9 million in 2019, chairman Terrence Bharath stated in the group's 2020 financial results.
A welcome boost to the group's profitability came from the newest cocoa flavour of its world-renowned bitters, especially in the United States.
Angostura enjoyed a 32 per cent growth in revenue in the US, it's second largest market, even though the country had the highest number of covid19 cases in world, and has since implemented a US trillion-dollar stimulus package for its economic recovery.
"We were able to list cocoa bitters in over 1,000 Walmart stores across the USA. The overall Bitters segment grew by 19.3% ($34.5m) as Cocoa Bitters boosted the brand and contributed to the soaring of at-home cocktail consumption in major international markets," Bharath said.
Angostura blends Trinitario cocoa, which remains one of the top flavours of cocoa worldwide, with Angostura bitters, which gives the product top notes of rich, floral, nutty cocoa to top off the already botanical and aromatic formula.
“Bottles wrapped in our distinctive labels will be journey across the ocean to be used by mixologists and chefs in ways that we may not have foreseen,” Bharath said with the new bitters was launched last July.
“TT should be proud of the pinnacle we have reached by merging our award winning cocoa with our world famous bitters. Opportunity presents itself with continued expansion of continued expansion of the entire cocoa growing and processing industry. A major local resource will be turned into foreign exchange and that is something we must remain proud of.”
Since then, a similar pattern of at-home drinking in TT, since bars were closed and are currently limited to take-away purchases, and no alcohol is allowed in restaurants, saw revenue grow by $58.2 million or 6.9 per cent. The local market contributed 70 per cent of overall sales and grew by 10.7 per cent or $61.1 million.
"The local rum segment contributed 93.8% of total revenue growth, as increased purchasing via supermarkets and wholesalers compensated for the closure of bars and restaurants arising from the restrictions associated with the covid19 pandemic," Bharath stated.
There were some declines, as Angostura's gross proﬁt margins fell to 47 per cent owing to increasing production costs related to the limited output of the waste water treatment plant, as repairs were inadvertently delayed. The impact was exacerbated by increased duty payment as local demand shifted to higher valued product offerings.
Last August, Angostura recommissioned its water resource recovery and anaerobic digester facility which was shut down in September 2019. The plant which is housed at the House of Angostura on the Eastern Main Road, Laventille, is expected to play a key role in the distilling process, by gathering waste water and waste solids which are discharged in the distilling process and treat it so that waste water is less toxic.
“When it was malfunctioning it was a nuisance because it gave off a bad odour. We also were not hitting all our EMA parameters so they knew that we had to fix it. Now we will hit 100 per cent of our parameters we will operate at full capacity, solved the odour problem and hit all our discharge parameters,” Angostura acting CEO Ian Forbes said then.
In the financial report, Bharath said the group continued its marketing strategy to sustain long-term growth for its products. It however incurred savings especially with limited promotions after Carnival.
"Savings in selling and marketing expenditure of $4.9 million or 3.5% due to the closure of the on-site consumption segment shortly after Carnival 2019, resulted from reduction in in-house promotions. Marginal savings in selling and administrative expenses, together with an increase in interest income of $4.1 million or 47%, resulted in reported proﬁt before tax of $212.7 million, an increase of $13.6 million or 6.8% over prior period."
Innovation, like the cocoa bitters, continued to be the group's focus during the pandemic.
"During this year of unplanned and unanticipated events that cowered our markets and our ability to expand our international focus as planned, we nonetheless focused on growth via innovation, and strategic proﬁability despite the challenges of the global pandemic.
"We adapted readily to evolving regulations, stipulations and protectionist measures locally, regionally and internationally, which affected supply chain, exports and consumption trends. Above all, in the face of the global pandemic, we sought to remain dynamic, to innovate and at the same time enhance and modernise our waste water treatment plant by being environmentally conscious," said Bharath.
He spoke of the group's hand sanitiser line to help support health protocols.
"We supported the efforts of the leadership of Government, religious and charitable causes in ensuring that our community near and far were provided with their basic necessities and devices to allow for home schooling. This was indeed a full corporate undertaking with engagement of all our employees who, at the height of the pandemic and throughout, worked as part of a team to achieve success."
A final dividend of $0.30 per share was approved with a payment date of September 21, 2021 and record date of September 03, 2021. The proposed dividend will represent a 15.4 per cent increase over the 2019 total dividend declared (2019: $0.26 per share) and earnings per share of $0.71 (2019: $0.69).