Monday, April 14, 2008

Angostura posts $137m loss

Rum and other spirits sales increased but a once-lucrative business deal gone sour led to local producer Angostura posting a $137.3 million after-tax loss in 2007.

The net loss means that Angostura shareholders will receive no further dividends for that financial period.

The Laventille-based rum maker reported an improvement in core operating performance for the year ended December 31, 2007, up from the previous year, with an increase in gross operating profit from $243.2 million to $299.3 million, Angostura chairman Lawrence Duprey said in his published report of the company's audited financial statements.

The company's core spirits business reflected a solid increase of $102 million, primarily as a result of increased liquor sales and marketing efforts locally and abroad, with all classes of its spirits business, including bulk rum, local and export cases, achieving positive gains, Duprey said.
Last year, the group sold its ethanol production subsidiary to parent group CL Financial and this resulted in a reduction of $97.4 million in reported revenue for Angostura.

Even with higher sales and better marketing, the group still showed a $137 million loss, largely as a result of a dispute in a business deal with French spirits company Belvedere SA.
Angostura had to reverse its non-cash gains for Belvedere in 2006 when it disposed of the French company last August for around $3 billion.

This followed a "serious shareholder dispute between our group and the founding shareholders of Belvedere SA", Duprey said in the Angostura financial statement yesterday.

Angostura and CL Financial are currently in the process of finalising another sale, this time for the 86 per cent acquisition of the Lascelles de Mercado Group, owners of Appleton Rum and other brands.

"In view of the year-end loss position, arising primarily out of our Belvedere acquisition and subsequent disposal and the fact that an interim dividend of five cents per share was already paid, your board has decided that no final dividend will be declared this year," Duprey told shareholders.

Curtis Rampersad
Trinidad & Tobago Express Newspapers
April 12, 2008

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