Angostura overcomes pandemic to earn $158m profit

Rum and bitters producer Angostura Holdings Ltd enjoyed an 8.7 per cent increase in after-tax profit of $158 million in 2021, overcoming the downturn effects of the covid19 pandemic.

Its strong performance is inflected in a 1.8 per cent increase in revenue to $921.6 million. The group’s assets increased by 6.7 per cent to $1.6 billion and the return on assets despite revenue constraints remained stable at 10 per cent.

Angostura recorded significant growth in its international markets in Europe and Australia – a 51 per cent increase over the previous average – with a 30 per cent jump in sales for its bitters and 34 per cent for its premium rum in Europe, the Middle East, Africa and Asia, exceeding 2019 pandemic levels by 57 per cent.

"Strong international demand was typical of countries that emerged from the global pandemic in 2021 because of rapid and aggressive vaccination of their populations," acting CEO Ian Forbes said in his financial review.

He noted a nine per cent revenue increase driven by demand for Angostura products in Europe, the Middle East, Asia, Africa, North America, the United Kingdom, Australia and Latin America.

In North America, there was high demand for rum with the standard and premium products increasing by 56 per cent and 52 per cent respectively, although bitters was not as strong as other markets, with a 22 per cent contraction in revenue due to logistical and labour challenges, Angostura chairman Terrence Bharath said in his report.

Its exports, especially the cocoa bitters, expanded to Argentina, Brazil, Peru, Chile, Puerto Rico and Uruguay. It also tapped into five new markets in Asia and Africa – Nepal, Kyrgyzstan, Tanzania, Zanzibar and the Maldives, and recorded significant growth in Nigeria and China.

"The group’s growth drivers were credited to aggressive off-trade growth, extension of shelf space and increased visibility, major event activations, trade promotions, sponsorships, key branding in the on-trade segment at critical outlets and e-commerce listings," said Bharath.

However, while internationally Angostura had robust earnings, the local market was severely impacted. Local sales declined by one per cent or $3.5 million owing to reduced rum and other alcohol sales as bars and restaurants were closed for most of the year and reopened with restrictions.

"The coronavirus pandemic had a more severe impact on Trinidad and Tobago in 2021 vs 2020 with reduced consumer spending due to unemployment and re-prioritisation of expenses to more essential items, as well as higher numbers of covid19 cases, hospitalisations and death," Forbes said in his review.

Bharath noted that with no Carnival in 2021 the impact on the loss of sales was greater.

"Locally, the impact of the pandemic was more severely felt than in 2020 with the loss of the Carnival season, reduced consumer spending, various public health restrictions and general uncertainty affecting demand," he said in his report.

The executives, however, noted inroads Angostura made with innovations from producing sanitisers to help in the public health fight to using the time to improve and introduce new flavours to its rum brands such as pink grapefruit and pineapple and a spiced rum. It also rebranded the LLB brand as Angostura Chill lemon, lime and bitters; blood orange and bitters and sorrel and bitters flavours.

Angostura also continued to work on the re-engineering of its water resource recovery and anaerobic digester facility (wastewater treatment plant) which despite a major setback owing to the pandemic, returned to full operating capacity by December 2021.

As a result of the 2021 results, a total dividend of $0.35 per share, a 16.7 per cent increase, will be paid to shareholders on July 29.