Dubai: A significant increase in the prices of Pepsi Cola and other drinks has helped its bottler Dubai Refreshments Co (DRC) to more than double its profit to Dh131.6 million in 2011, up from Dh64.7 million recorded in 2010, the company said.
Its net revenue increased 27 per cent to Dh987 million compared to the Dh779 million made in 2010.
"The growth in revenue was driven by a significant increase in the export business as well as increase in consumer prices in January of 2011, which was a similar move made by other soft drinks producers in the GCC. While local business unit volume declined due to price increase, expansion of exports helped offset this decrease with total unit volume increasing by 7 per cent compared to 2010," the company said in a statement.
"The increase in revenue and unit volumes combined with diligent cost control efforts helped expand DRC’s gross and net margins with operating profits more than doubled to Dh126.6 million, a drastic increase compared to the Dh61.4 million of the previous year. Income from investments and interest added another Dh5.0 million bringing total net income to Dh131.6 million a twofold value of the previous year’s net income of Dh64.7 million."
The financial results of 2011 are a continuation of the dramatic turnaround of DRC which had begun in 2009 whereby the new Board started implementing major changes in the company. DRC has witnessed profits climbing from a low of Dh14.39 million in 2008 to the astounding Dh131.6 million in 2011.
This has been achieved despite of a significant increase in raw material and energy prices. Despite the difficult global economic environment, Dubai Refreshments Company is bucking the trend and is presenting strong growth in revenue and earnings.
For the year 2010, DRC paid a cash dividend of Dh0.50 per share in 2011 along with the issuance of 50 per cent bonus shares. This has resulted in increase in share capital from Dh60 million to Dh90 million.
The company announced earlier this year that it had allocated more than Dh500 million for a new state of art manufacturing plant in Dubai Investment Park. The new facility is expected to begin production in 2013 and will be one of the largest and most modern beverage production facilities in the Middle East.
The board and the shareholders of Dubai Refreshments Company have authorised this significant investment during a time when other businesses are delaying investment decisions.
Ahmad Al Serkal, Chairman of Dubai Refreshments added, “We believe that Dubai and the UAE’s economies are strong, and will continue to have sturdy growth prospects over the long term. We also believe that our location in Dubai with its state of the art infrastructure and central trading position gives us the potential to take advantage of opportunities that will arise in the future and we want to be prepared for these opportunities when they turn up. Our investment program is a reflection of the strength of our belief in Dubai and the UAE. There simply is no better place than Dubai that meets standards where we would invest our money in today’s global economic conditions.”
