NASSAU BAHAMAS — Commonwealth Brewery has reported a 30.5 percent decline in net revenue for the first half of the year, with its operations having been significantly impacted by the COVID-19 pandemic.
The BISX-listed brewer in its Q2 financial statements noted that the company’s net revenue during the second quarter alone of the year was down by nearly 50 percent, with the company having suffered a net loss of $3.16 million for the first six months of the year.
“The COVID-19 pandemic has had a significant impact on Commonwealth Brewery Limited’s (CBL) operations in the second quarter of 2020,” the company stated.
“The temporary cessation by government of alcohol sales (between March 19th and May 6th), the dramatic increase in unemployment and the virtual halt in tourist arrivals severely reduced operating results and required that our business continuously adjust to the diverse challenges posed by the impact of the COVID-19 pandemic.”
It continued: “During the period of the community lockdown, CBL successfully transitioned the back office staff to remote working. Following the resumption of alcohol sales in early May, CBL successfully utilized new routes to market leveraging our online store www.700winesandspirits.com with store to door delivery.
“Net revenue during the second quarter declined by 47.8 percent, while operating expenses reduced by 30 percent. As a result, a total comprehensive loss of $3 million was realized, compared to a positive result of $4.12 million during the corresponding period of 2019.”
The company noted that as a result of the second quarter’s operations, net revenue for the first half of 2020 declined by 30.5 percent, and the net loss for the first six months of the year was $3.16 million.
The company further noted that its second quarter results and other short-term balance sheet adjustments have necessitated an increase in short-term borrowing of $8 million, compared to the position at the end of the first quarter of the year.
“CBL also implemented other mitigating actions such as revising our credit terms and reducing the recurrent operational spend,” the statement read.
“CBL will continue its focus on top line sustainability and cost reduction. During this period of uncertainty, CBL has maintained its current staff complement prior to the lockdown and maintained salary levels and full staff benefits by the above leveraging of its financial position.
“The decrease to personnel costs in the second quarter of 16.3 percent is due to management’s decision to forgo any 2021 bonus related to the 2020 financial year. The impact of the COVID-19 pandemic and related measures taken by the government to combat its spread, have resulted in unavoidable constraints on our operations and results.”
It added: “However, actions taken thus far are to ensure that CBL limits the longer-term impact to our business. Management is confident that CBL is poised to rebound and return to profitability once economic conditions permit.”