May 17, 2021
Derrimon Trading Limited (DTL), for the three months ended March 31, 2021,reported trading income of $4.01 billion compared to the $3.32 billion booked for the prior year’s comparable period, a 21% increase. This is as a result of, “Derrimon Trading’s new 80% subsidiary holding, Marnock LLC, which was acquired during this quarter and provided a boost to revenue.” Also “During this quarter the new Covid-19 restrictions imposed, namely reduced operating hours, resulted in a negative impact on the revenue of the various Companies within the Group,” according to DTL.
Cost of sales increased by 20% to $3.26 billion for the period (2020: $2.71 billion). As a result, Gross profit amounted to $751.73 million relative to $612.71 million for the prior comparable period, an increase of 23% year over year.
Other income for the period under review rose slightly by 1% to close the quarter at $22.77 million relative to $22.65 million booked in the prior comparable period.
Total operating expenses totalled $574.76 million for the period under review, representing a growth of 21% on the $473.38 million recorded in the prior year’s corresponding quarter. Of this, Administrative expenses amounted to $473.86 million, 27% higher when compared to the $373.18 million in 2020. Selling and distribution expenses recorded a 1% increase for the quarter, totalling $100.90 million (2020: $100.21 million).
It was noted that the increase in operating expenses was, “driven by new expenses from our new subsidiary Marnock LLC, increases in lease payments and the exchange rate translation given the depreciation of the Jamaican Dollar to the US Dollar, trucking and delivery charges, cost associated with the new Distribution Centre, utilities and increased insurance charges given the requirements of the US jurisdiction,” as noted by Management.
For the quarter, finance cost closed at $23.24 million versus $49.30 million in the 2020, a 53% decline year over year. The Company stated, “during the quarter, the strategy of liquidating short-term debt and early retirement of long-term debt was an important utilization of the capital raised from the Additional Public Offer. As a result of the immediate implementation of this strategy.”
Consequently, profit before taxation grew to $176.50 million compared to $112.67 million in 2020. After incurring tax charges of $15.90 million (2020: $13.85 million), net profit amounted to $160.61 million, a 63% growth when compared to $98.82 million reported for the first quarter of 2020. Net profit attributable to shareholders amounted to $154.17 million compared to $91.62 million recorded in 2020.
Earnings per share (EPS) for the quarter closed the period at $0.034 (2020: $0.020), The twelve months trailing earnings per share amounted to $0.076. The total number of shares used in the computation amounted to 4,533,360,670 units. Notably, DTL closed the trading period on May 14, 2021 at a price of $2.58 with a corresponding P/E of 34.16 times.
DTL highlighted that, “during the quarter under review, our partnership with Barita Investments Limited ensured that DTL successfully completed the largest Additional Public Offer by a JSE Junior Market Company, raising new capital of J$4.08 billion which will assist with the transformation of our Company. Other notable transactions and achievements in the quarter include: Completion of the purchase of FoodSavers New York (New York), completion of the purchase of Good Food For Less (New York), liquidation of J$1.92 billion in short and long term debt, J$1.12 billion invested in both US Dollar and Jamaican Dollar instruments, commencement of work on the building out of a new supermarket and acceleration of the implementation of our new group technology platform.”
Balance Sheet Highlights:
As at March 31, 2021, the Company’s assets totaled $9.28 billion (2020: $5.85 billion), 59% more than its value as at March 31, 2020. This was due to largely to increases in ‘Investment’ and ‘Cash and Bank’ amounting to $1.42 billion (2020: $245.57 million) and $934.16 million (2020: $238.51 million), respectively. Also, ‘Inventories’ and ‘Receivables’ contributed to this increase by closing the period at $2.45 billion (2020: $1.98 billion) and $1.85 billion (2020: $1.43 billion), respectively.
Total Shareholders’ Equity totalled $5.30 billion (2020: $1.26 billion), which translated to a book value of $1.17 (2020: $0.28).
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