GEL reports increases in net income, earnings per share

LEADING private sector company Goddard Enterprises Limited (GEL) is reporting a six per cent increase in net income and a 9.5 per cent increase in earnings per share.

Reviewing the GEL Group’s performance for the financial year ended September 30, 2019, were Chairman Charles Herbert and Managing Director Anthony Ali.

Revenues increased 7.7 per cent from $805.8 million to $868.3 million at the end of the reporting period.

In addition, the two officials said that the Group applied International Financial Reporting Standards (IFRS) 15 – Revenue from contracts with customers and IFRS 9 – Financial Instruments for the first time.

There was also a change to the functional currency of their subsidiary in Caracas (Venezuela) from local Bolivars to the United States dollar.

However, they said that the effect of that IFRS was immaterial to the Group’s total revenues of $868.3 million and attributed the 7.7 per cent increase in top line growth to “an increase in contracts from customers in our cocoa manufacturing entity”.

However, the Chairman and the Managing Director noted that despite the increase in revenues, before other gains/(losses) net of $48.5 million fell 12.8 per cent below that of the prior year.

“Market pricing issues experienced by the cocoa industry in Ecuador and sales well below production capacity resulted in a less favourable performance of Proecukao,” they pointed out.

Furthermore, a slump in demand for new vehicles caused by local and regional economic issues significantly impacted the Group’s Auto Division.

With production efficiency issues having negatively impacted the performance of our local bakery, Messrs Herbert and Ali remarked that the company’s “selling, marketing and administrative expenses include $3.6 million for expected credit losses on financial assets required under IFRS 9 compared with a provision of impairment of receivables of $1.1 million in the prior year”.

Overall, net income for the year was $46.6 million as taxation declined $2.4 million or 13.3 per cent. The change in the tax rate in Barbados resulted in a tax reduction of $0.6 million.

Earnings per share of 13.8 cents was achieved compared with 12.6 cents in the previous year.