DTL reports 32% increase in nine months net profit attributable to shareholders

Date: November 14, 2019

Derrimon Trading Limited (DTL), for the nine months ended September 30, 2019, reported consolidated trading income of $9.53 billion, an increase by 50% when compared to the $6.34 billion booked in 2018. For the quarter, the Company reported a 36% increase in trading income totalling $2.96 billion relative to $2.18 billion in the previous corresponding quarter. DTL indicated that, “the improvement was driven by the performance of the core business as well as positive contributions from the subsidiaries, Caribbean Flavours and Fragrances and Woodcats International Limited. Woodcats International Limited and the SM Jaleel distribution portfolio are both now experiencing their first full year of performance.”

Cost of sales increased by 51% to $7.87 billion for the period (2018: $5.21 billion). As a result, Gross profit amounted to $1.66 billion relative to $1.13 billion the year prior, an increase of 46% year over year. Gross profit for the quarter totalled $484.93 million (2018: $357.64 million). DTL stated that, “The improvements were primarily attributed to more favourable purchasing transactions as well as the strategic focus on higher yielding products.”

Other income for the period fell by 53% to close the nine months at $20.49 million compared to $43.75 million in 2018. For the quarter, other income closed at $3.94 million (2018: $19.43 million).

Total operating expenses was $1.27 billion for the period under review, representing a growth of 43% on the $885.65 million recorded in the prior year. For the quarter, total operating expenses closed at $393.04 million (2018: $301.58 million). According to DTL, “This increase was partly due to annual increases in salaries and wages at the beginning of second quarter of this financial year, utilities which were impacted by the depreciation of the Jamaican dollar and the full costing of both SM Jaleel portfolio and Woodcats International limited which came on board during September 2018.”

Of this:

Administrative expenses totalled $983 million, 30% more when compared to the $757.97 million in 2018. Selling and distribution expenses recorded a gross increase for the consolidated period, totalling $282.74 million (2018: $127.69  million). For the quarter, administrative expenses and selling & distribution expenses closed at $302.43 million (2018: $249.48 million) and $90.61 million (2018: $52.10 million).

Finance cost increased by 43% amounting to $159.38 million for the period versus $111.37 million in 2018. For the quarter, finance cost closed at $58.99 million (2018: $43.05 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 $33.16 million (2018: nil), Net profit amounted to $221.12 million, a 22% increase year over year when compared to $180.55 million reported in 2018. The Company posted a 1% decline in net profit to close the quarter at $32.24 million (2018: $32.45 million).

Net profit attributable to shareholders closed at $203.55 million (2018: $153.84 million), up 32% year over year.

As a result, earnings per share (EPS) closed the consolidated period at $0.074 (2018: $0.056). For the quarter, EPS amounted to $0.012 (2018: $0.012). The twelve-month trailing EPS is $0.109. The total number of shares used in the computation amounted to 2,733,360,670 units. DTL closed the trading period on November 14, 2019 at a price of $2.57.

Balance Sheet Highlights:

As at September 30, 2019, the Company’s consolidated total asset amounted to $4.52 billion, $793.36 million more than the $3.73 billion booked as at September 30, 2018. This was due mainly to increases in ‘Receivables’ and the cash balance. Receivables totalled $1.44 billion (2018: $1.05 billion), while Cash & Bank balance amounted to $483.46 million (2018: $185.33 million).

Shareholders’ Equity totalled $1.44 billion (2018: $1.16 billion), which translated to a book value per share of $0.53 (2018: $0.42).

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