By NEIL HARTNELL
Tribune Business Editor
Commonwealth Brewery produced a more-than $7.32m bottom line reversal to return to profitability in the 2021 second quarter, with its revival aided by relaxed COVID restrictions and a more open economy.
The BISX-listed brewer was also up against weak comparatives as the year-before period featured the harshest pandemic lockdown measures, enabling it to enjoy a 63.7 percent or near $11m year-over-year increase in top-line revenue. And it received a further boost from a $1.2m revaluation gain on the worth of one of its Grand Bahama properties, which went straight to boost the bottom line.
Hit hard last year by the tourism industry’s shutdown, rising unemployment and reduced incomes, and restrictions on bars, restaurants and nightclubs, as well as alcohol sales generally, the vertically-integrated brewer, distributor and retailer, said: “Commonwealth Brewery (CBL) experienced a dramatic increase in net revenue during the second quarter – up 63.7 percent when compared to the second quarter of 2020.
“This increase was expected as the country continues its slow return to normalcy, inclusive of the ease of government-levied restrictions, the reduction in unemployment and a sharp boost in tourist arrivals. This is in stark contrast to the same period last year during which the country was in the middle of the economic downturn due to the COVID-19 pandemic, in particular the halt of tourism, and the cessation by government of alcoholic sales.”
Commonwealth Brewery’s top-line revenue for the three months to end-June 2021 was up year-over-year by 64.5 percent, climbing to $29.965m compared to just $18.217m the prior year. Net revenues rose from $16.527m in the 2020 second quarter to just over $27m.
“In the second quarter, operating expenses increased by more than $4m or 20.9 percent compared to the same period in 2020,” the Kalik maker said. “The uptick in expenses during the period was due to an increase in the cost of raw materials, consumables and services.
“These were inclusive of an increase in production and utility costs as we ramped up business to meet consumer demand during this period as opposed to last year when our business came to a halt due to the restrictions imposed to curb the spread of COVID-19.
“However, it must be noted that there was only a marginal increase of 0.1 percent in costs for the first half of 2021 over the comparative period in 2020, illustrating that our cost mitigating strategies have been effective.”
As a result, Commonwealth Brewery generated $4.448m in total comprehensive income for the 2021 second quarter compared to a $3.005m loss the year before. That was sufficient to wipe out its minor first quarter loss and produce a total comprehensive profit of $4.164m for the first half or six months to end-June.
“Consequently, in the second quarter, Commonwealth Brewery experienced a net profit of $3.248m which is in stark comparison to the net loss of $3.005m suffered during the same period last year,” the BISX-listed company said.
“Overall, Commonwealth Brewery realised comprehensive income of $4.164m for the first six months in 2021. This was inclusive of a revaluation gain of $1.2m on one of our main properties in Grand Bahama. Management will continue to adjust its business strategies as we continue to restore operating results to pre-COVID 19 levels.”