Bahrain duty free profits go up in smoke

Bahrain Duty Free (BDF) said it is facing a challenging 2013 as the 'death head skull' symbol that now has to appear on all cigarette packets sold in the kingdom could cost the airport retailer 20 per cent of its profit this year. The BFD is also reeling under pressure due to the cuts in Gulf Air flights and the closure of Bahrain Air threatening to reduce its customer base, reported the Gulf Daily News, our sister publication. "It is a challenging year for the BDF as it comes to terms with an embargo by tobacco companies," said its chairman Farouk Almoayyed while speaking at the company's annual general meeting held yesterday. The company can no longer sell duty free cigarettes at the airport because international tobacco companies are refusing to supply them if the logo is on them. Bahrain is the only GCC country that insists these anti-smoking pictures are produced on duty free cigarettes, said Almoayyed on the sidelines of the AGM at the Gulf Hotel yesterday. "Cigarette sales at BDF have a high margin and this ban will hit our profitability this year," he said. "We will also suffer from the closure of Bahrain Air flights and more importantly the reduction in services by Gulf Air which is the airport's major carrier. BDF reported a net profit of BD6.4 million ($16.97 million) for last year, representing an increase of 17.4 per cent over 2011. Total revenue grew by 2.7 per cent, amounting to BD27.5 million compared to BD26.8 million in 2011. Gross profit increased by 6 per cent in value and the gross profit margin moved up by a further 3.2 per cent. Operating cost reduced by 6.4 per cent and operating profit as a result, increased by 22.5 per cent. Investment income of BD2.2 million was recorded giving an increase of 8 per cent on prior year. Impairment on investments reduced by 53 per cent amounting to BD400,000 compared to 2011. The investment portfolio at the end of last year had a value of BD18.3 million, which grew by 36.6 per cent over last year driven mainly by new investments. Return on average equity for the year stood at 17.4 per cent, an increase of 13.7 per cent over 2011. Earnings per share were 65.4 fils, a growth of 18.3 per cent year on year. The board is recommending a cash dividend of 50 fils per share, of which 20 fils was distributed last year. TradeArabia News