November 16, 2020
Derrimon Trading Co. Ltd (DTL)
Financial Statements for the Nine Months Ended September 30, 2020:
Derrimon Trading Limited (DTL), for the nine months ended September 30, 2020, reported consolidated trading income of $9.62 billion, an increase of 1% when compared to the $9.53 billion booked in 2019. For the quarter, the Company reported a 2% increase in trading income totalling $3.32 billion relative to $3.24 billion in the previous corresponding quarter. DTL indicated that, “The improvements realised for this nine-month period was primarily attributed to a combination of factors which includes improvement in the procurement and logistics process as well as a focus on higher yielding products.”
Cost of sales decreased by 1% to $7.78 billion for the period (2019: $7.87 billion). As a result, Gross profit amounted to $1.84 billion relative to $1.66 billion the year prior, an increase of 11% year over year. Gross profit for the quarter totalled $640.94 million (2019: $564.72 million).
Other income for the period increased by 207% to close the nine months at $62.97 million compared to $20.49 million in 2019. For the quarter, other income closed at $21.52 million (2019: $8.34 million).
Total operating expenses was $1.44 billion for the period under review, representing a growth of 14% on the $1.27 million recorded in the prior year. For the quarter, total operating expenses closed at $505.60 million (2019: $441.54 million). According to DTL, “This was influenced by increased rental expenses in relation to the new Distribution Centre, salaries and wages, utilities which were impacted by the depreciation of the Jamaican dollar and other operational costs driven by the new sanitation regime given the requirements of the Covid-19 pandemic.
Administrative expenses totalled $1.14 billion, 13% more when compared to the $983 million in 2019. Selling and distribution expenses recorded a gross increase for the period, totalling $304.07 million (2019: $282.74 million). For the quarter, administrative expenses and selling & distribution expenses closed at $389.37 million (2019: $351.84 million) and $116.23 million (2019: $89.70 million).
Finance cost decreased by 8% amounting to $146.03 million for the period versus $159.38 million in 2019. For the quarter, finance cost closed at $54.91 million (2019: $63.69 million). It was noted that, “The realignment of our debt portfolio from short term to long term amortized facilities, the switching from US Dollar loans to Jamaican Dollar facilities and the re-negotiation of interest rates continued to positively impact the finance cost of the Group.”
After incurring taxation of $34.84 million (2019: $33.16 million), Net profit amounted to $280.67 million, a 27% increase year over year when compared to $221.12 million reported in 2019. The Company posted a 54% climb in net profit to close the quarter at $90.70 million (20189 $58.99 million).
Net profit attributable to shareholders closed at $258.60 million (2019: $203.55 million), up 27% year over year. For the quarter net profit attributable to shareholders amounted to $85.11 million (2019: $54.79 million).
As a result, earnings per share (EPS) closed the consolidated period at $0.095 (2019: $0.074). For the quarter, EPS amounted to $0.031 (2019: $0.020). The twelve-month trailing EPS is $0.1265. The total number of shares used in the computation amounted to 2,733,360,670 units. DTL closed the trading period on November 13, 2020 at a price of $2.70.
Balance Sheet Highlights:
As at September 30, 2020, the Company’s consolidated total asset amounted to $5.72 billion, $1.20 billion more than the $4.52 billion booked as at September 30, 2019. Notably, the Company recorded right of use assets valuing $961.95 million (2019: nil). The growth in assets was also due to increases in ‘Investment’ and ‘Inventories’. Investment totalled $301.13 million (2019: $243.15 million), while inventories amounted to $1.79 billion (2019: $1.32 billion).
Shareholders’ Equity totalled $1.59 billion (2019: $1.44 billion), which translated to a book value per share of $0.58 (2019: $0.53).
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