DTL reports 42% increase in six months net profit

Date: August 16, 2018 

Derrimon Trading Limited (DTL) Trading Income climbed by 33%, to end the six months at $4.04 billion compared to the $3.05 billion for the prior period. For the quarter the company reported a 38% increase in Trading Income totalling $2.10 billion relative to $1.52 billion. Management noted, “The six months (6) revenue from the Distribution and Retail segment was $3,830.119 billion which was $986.631 million or 34.70% over the $2,843.488 billion reported for the corresponding six (6) months period in 2017. For the second quarter ending June 2018, revenue generated was $1,979.822 billion representing a growth of $574.513 million or 40.88% over the similar period in 2017.”

Cost of Sales increased by 34% to $3.31 billion for the period (2017: $2.46 billion). As a result, Gross Profit amounted to $731.57 million relative to $580.72 million the year period, an increase of 26% year over year. Gross profit for the quarter totalled $1.72 million relative to $1.22 million reported the prior period. DTL highlighted “The improvement in margins is due to strategies employed within both segments of the business such as the discontinuation of non-performing products and improved margins from the growth of the supermarket portfolio.”

Other Income for the period improved 114% to close the six months at $24.33 million relative to $11.36 million in 2017.

Total operating expenses was $559.73 million for the period, representing a growth of 24% on the $453.06 million recorded in the prior year. Administrative expense totalled $484.90 million, 22% higher when compared to the $396.89 million in 2017. Selling and distribution expenses recorded a 33% increase for the period, totalling $74.83 million (2017: $56.17 million). The management of DTL has indicated that, “The operating cost of the two new supermarkets, that were acquired during the first quarter of 2017, is now fully reflected in this year’s six (6) months period. There were also general increases in administrative cost such as salaries.”

Finance Cost increased by 39% to total $73.35 million for the period relative to $52.70 million in 2017. The company indicated that “The company signed an agreement with Sagicor Bank to refinance $550 million of its debt. This will be amortized over 10 years at an interest rate of 9.50%. This will lead to significant reduction in our interest cost. Other strategies to reduce finance cost is being implemented and the full impact will be realized in the short to medium term.”

Consequently, profit before taxation grew by 42% ending the period at $122.82 million for the six months compared to $86.33 million in 2017.  No taxes were reported for the period as such Net Profit amounted to $122.82 million a 42% increase year over year. For the quarter the company reported a 45% increase in Net Profits to $65.25 million (2017: $45.05 million).

Earnings per share (EPS) closed the period at $0.45 (2017: $0.32), while for the quarter the EPS was $0.24 (2017: $0.16). The twelve month trailing EPS amounted to $0.82. The total number of shares used in the computation amounted to 273,336,067 units. Notably, DTL closed the trading period on August 16, 2018 at a price of $25.50.

Balance Sheet Highlights

As at June 30, 2018, the company’s assets totalled $2.39 billion, $113.41 million more than its value as at June 30, 2017 of $2.28 billion. This was due to 97% increase in ‘Fixed assets’ and a 83% increase in ‘Investment’ to total $417.09 million ($212.23 million) and $186.26 million (2017: $151.87 million) respectively.

Shareholder Equity totalled $1.11 billion (2017: $1.03 billion) which translated to a book value of $4.06 per share (2017: $3.79).


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