Angostura Holdings Ltd has recorded a $74 million, or a 20.2 per cent increase, in profit before tax for the first six months of 2021.

In its unaudited consolidated financial statement, chairman Terrence Bharath, on July 30, said an improvement in gross profit margins, an improvement in credit outlook in international markets, and an increase in the return on investment of surplus funds were the three main factors responsible for its profitability.

“Owing to improvement in the efficiency of the wastewater treatment facility, gross profit margins increased to 48 per cent from 46 per cent over the prior period as distillery alcohol production normalised in 2021 compared to 2020.

“An improvement in international markets, both in terms of revenue and credit outlook, directly impacted the expected credit loss model resulting in a significant write back — $4 million — of this selling expense at June 30, 2021.”

[caption id="attachment_905054" align="alignnone" width="1024"] Angostura chairman Terrence Bharath at the launch of the rum company's cocoa bitters at Angostura House on July 29, 2020. - File photo[/caption]

For the period June 30, 2020, Angostura's profit before tax was $63 million, which was due to the specific covid19 factor which had an exceptional negative impact on operating margins.

Bharath added that Angostura’s revenue locally was challenged when compared to the same period in 2020 because rising covid19 cases directly impacted staff and negatively impacted production.

He said recovery in growth was based on increased sales in international markets, especially with Angostura bitters product.

“The increase in returns on the investment of surplus funds of $2.5 million, or 46 per cent, further secured growth in profit before tax for the six-month period.

“Revenue growth over prior year was mainly driven by recovery in Australasia (bitters), North America (bitters), Europe (bitters and rum), and the UK (bitters). These markets collectively contributed $43.6 million in revenue growth which was then offset by the contraction in the local market.”

Additionally, Barath said the company’s board of directors has recommended an interim dividend of $0.09 per share.

“As we look forward to the remaining fiscal year, we will continue to drive revenue and focus on maximising global opportunities while supporting recovery in the local markets.

“While uncertainty and volatility may remain as the world continues to recover from the global pandemic, we are confident that market recovery will rebound in our favour over the remaining half of this fiscal year.”

Dividends will be paid on October 25 to shareholders on the record date of October 6.