DTL reports 29% increase in three months net profit

Date: May 15, 2019

Derrimon Trading Limited (DTL) for the three months ended March 2019 grew its Trading Income by 63%, to end the quarter at $3.15 billion compared to the $1.94 billion for the first quarter of 2018. The Company noted, “The growth in revenue was primarily influenced by the addition of the SM Jaleel portfolio and further deepening of the grains, oils and fats portfolio of the distribution business as well as significant generic growth in the Retail Division.” In addition, “The Group’s Consolidated revenue growth was positively influenced by the contribution Caribbean Flavours and Fragrances as well as the new 100% shareholdings in Woodcats International Company Limited.”

Cost of Sales increased by 64% to $2.60 billion for the period (2018: $1.59 billion). As a result, Gross Profit amounted to $552.12 million relative to $353.48 million the year prior, an increase of 56%. Management noted, “This performance reflects a combination of improvement in margins arising from strategies employed by the distribution & retail segments of the business and the broadening of the Company’s distribution portfolio.”

Other Income for the period declined 27% to close the period at $4.92 million relative to $6.73 million booked the prior year.

Total operating expenses amounted to $414.20 million for the period, representing an increase of 57% on the $264.27 million recorded in the prior year. Of this, Administrative expense totalled $320.68 million, a 40% increase when compared to the $229.82 million in 2018 while selling and distribution costs closed the quarter at $93.52 million (2018: $34.45 million). Management noted, “The major factors for this increase include the full quarter impact of the cost associated with the new distribution of the SM Jaleel suite of products, increased delivery costs as mentioned above and costs from regular operations such as utilities, internal and external audit fees, marketing expenses, and general staff costs.” “The full expenses of the new subsidiary, Woodcats International Company Limited are included in this reporting period and were not a part of our operations for the similar period last year “
Thus, operating profit for the period posted a 49% growth to $142.84 million in contrast to $95.94 million booked a year earlier.

Finance Cost increased by 52% to total $58.28 million for the period relative to $38.37 million in 2018. This “represents cost associated with existing loan portfolio inclusive of financing associated with the purchase of 100% shares of Woodcats International and working capital support which is required for the growth in the business” the company noted.

Consequently, profit before taxation grew by 47% ending the period at $84.57 million for the quarter compared to $57.57 million in 2018. Taxes of $10.57 million was reported for the period relative to nil the prior year. As such, Net Profit amounted to $74.0 million (2018: $57.57 million).

Total comprehensive income totalled $68.51 million versus $51.60 million reported a year earlier.

Earnings per share closed the period at $0.025 (2018: $0.019). The twelve month trailing EPS amounted to $0.11. The total number of shares used in the computation amounted to 273,336,067 units. As at May 15, 2019 DTL closed the trading period at $2.56.

Balance Sheet Highlights

As at March 31, 2019, the company’s assets totalled $4.36 billion 62% more than its value as at March 31, 2018 of $2.69 billion. This increase in the asset base was due to upward movement in ‘Receivables’ (118%) and ‘Inventories’ (41%) to total $1.69 million (2018: $772.49 million) and $1.16 billion (2018: $824.01 million) respectively.

Shareholder Equity totalled $1.30 billion (2018: $1.06 billion) which translated to a book value of $0.41 per share (2018: $0.33).


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