NASSAU, BAHAMAS — Commonwealth Brewery (CBL) plans to cut as many as 34 employees in a restructuring exercise due to the COVID-19 pandemic, having suffered a net loss of $3.4 million as a result of the pandemic for the first nine months of the year.
The BISX-listed brewer said in a statement that it is completing a restructuring exercise as a result of the pandemic.
“Like many companies, CBL faces significant financial challenges as result of a combination of low tourism numbers, high unemployment and COVID-19-mitigating measures that have all caused a drastic decline in its sales volume,” the statement read.
“Nonetheless, the company honored its commitment to no COVID-related layoffs in 2020; however, it is simply unsustainable to maintain a full staff complement through 2021.
“The impact to the company’s financial position means that CBL has to restructure to stabilize its operations, while also positioning itself to rebound in the new year. A part of that restructuring involves the possible redundancy of less than 10 percent of employees.”
The company said all employees who may be made redundant will be paid their full salary and benefits into the new year.
“In fact, CBL is firmly committed to handling the entire exercise with respect, transparency, speed and support to those who may be impacted,” it said.
“Since the start of the crisis, the company has implemented a number of cost-saving measures that have lessened the impact to its team. Those cost-saving measures have allowed the company to retain more than 90 percent of its team members, who will be instrumental in helping CBL position itself for recovery and growth and 2021.”
Commonwealth Brewery in its unaudited financial statement for the nine months ended September 30, 2020 noted that during the third quarter of 2020, the government of The Bahamas continued measures to curtail the spread of COVID-19 by instituting additional lockdowns, curfews and limitations on social gatherings.
“These factors contributed to a less-than-favorable third quarter for the company given that commercial activities were limited due to the factors described and the strain on consumer’s disposable income. CBL’s management and staff will continue to navigate through the constant changing circumstances with the goal of weathering the pandemic and returning to profitability at the earliest possible time,” the company said.
It added: “CBL’s management has been able to achieve financial stability through early actions taken during the first quarter of the year by increasing short-term financing. This proved pivotal to CBL’s ability to navigate periods of lockdown during which revenue has severely reduced due to the halt of economic activity. This short-term financing strategy has been sustainable through the third quarter with the company not requiring further financing. Net revenue during the third quarter declined by 27.8 percent, while operating expenses reduced by 19.8 percent compared to the third quarter 2019.
“The overall impact to CBL from the effects of COVID-19 has been a net loss of $3.4 million for the first nine months of 2020.”