March 3, 2022
Derrimon Trading Limited (DTL), for the year ended December 31, 2021, reported trading income of $17.74 billion compared to the $12.78 billion for the prior comparable period, a 39% increase. For the quarter, trading income went up by 76% closing at $5.55 billion (2020: $3.16 billion).
Cost of sales increased by 39% to $14.34 billion for the period (2020: $10.30 billion). As a result, Gross profit amounted to $3.41 billion relative to $2.48 billion for the prior comparable period, an increase of 37% year over year. Gross profit for the quarter totalled $1.05 billion (2020: $642.16 million).
Other income for the period under review rose 6% to close the year end at $103.89 million relative to $97.86 million booked in the prior comparable period. While for the quarter, other income closed at $26.42 million (2020: $34.88 million).
Total operating expenses totalled $2.73 billion for the period, representing growth of 48% on the $1.84 billion recorded in the prior corresponding period. Of this, Administrative expenses amounted to $2.33 billion, 63% higher when compared to the $1.42 billion booked in 2020. Selling and distribution expenses recorded a 4% decrease for the period, totalling $402.29 million (2020: $418.63 million). For the quarter, administrative and selling and distribution expenses closed the period at $749.33 million (2020: $286.98 million) and $89.86 million (2020: $89.86 million), respectively.
Finance cost declined to total $231.32 million (2020: $384.49 million). While, for the quarter, finance cost closed at $150.80 million versus $238.46 million in the previous comparable quarter.
Consequently, profit before taxation grew to $555.72 million compared to $355.19 million in 2020. After incurring tax charges of $107.54 million (2020: $44.10 million), net profit amounted to $448.18 million, a 44% growth when compared to $311.09 million in the prior corresponding period. For the quarter, the Company reported a 7% increase in net profit to $28.40 million (2020: $27.78 million). Net profit attributable to shareholders amounted to $399.94 million compared to $279.83 million recorded in 2020.
Earnings per share (EPS) closed the period at $0.09 (2020: $0.06), while for the quarter, the EPS was $0.01 (2020: $0.01). The total number of shares used in the computation amounted to 4,533,360,670 units. Notably, DTL closed the trading period on March 3, 2022 at a price of $2.97 with a corresponding P/E ratio of 33.67 times.
According to DTL, “the revenue stream in the key US market and internal portfolio adjustments during the financial year were pivotal to the Group navigating the many market dynamics which were created by the impact of the global pandemic. The major price adjustments experienced, due to unprecedented logistics and global supply chain costs as well as general price increases and the depreciation of the Jamaican Dollar, all resulted in escalated costs which negatively affected our business.”
Furthermore, “during the financial year, there were many factors which influenced the financial outcome of the Group; these include:
- Successful completion of the Additional Public Offering (APO) in February 2021 which broadened of the Company’s capital base and provided additional cash to the group.
- Reduction in the debt profile of the Company and the Company’s growth debt stock by approximately J$2.176 billion.
- Acquisition of FoodSavers New York and Good Food for Less utilizing cash raised from the Additional Public Offer.
- Acquisition of Spicy Hill Farms Limited in November 2021.
- Acceleration of the build out of the new Select Grocers located at the Millennium Mall in Curatoe Hill, Mineral Heights, Clarendon.
- Implementation of the new technology platform – Microsoft Business Central as well as modern Computer Hardware to support business growth.
- Growth in the revenue and profitability from the Retail and e-Commerce Segments of the business, despite the negative impact on revenue segments driven by the continued closure of schools, offices and limited operations in some restaurants and small shops.
- Increase in revenue from many of the portfolios within the Distribution Segment despite the elimination of the ambient beverage portfolio on March 30, 2021.
- Negative impact on revenue and increased costs associated with sporadic closure of large wholesales during the year and curfew/lockdowns that reduced economic activity hours.
- Additional discounts given to customers to help alleviate the economic downturn on them.”
Balance Sheet Highlights:
As at December 31, 2021, the Company’s assets totaled $11.51 billion (2020: $7.42 billion), 55% more than its value as at December 31, 2020. ‘Property, plant and equipment’ and ‘intangible assets’ contributed to this increase amounting to $2.35 billion (2020: $537.79 million) and $1.65 billion (2020: $438.64 million), respectively.
Total Shareholders’ Equity totaled $5.55 billion (2020: $1.43 billion), which translated to a book value of $1.23 per share (2020: $0.31).
Disclaimer:
Analyst Certification -The views expressed in this research report accurately reflect the personal views of Mayberry Investments Limited Research Department about those issuer (s) or securities as at the date of this report. Each research analyst (s) also certify that no part of their compensation was, is, or will be, directly or indirectly, related to the specific recommendation (s) or view (s) expressed by that research analyst in this research report.
Company Disclosure -The information contained herein has been obtained from sources believed to be reliable, however its accuracy and completeness cannot be guaranteed. You are hereby notified that any disclosure, copying, distribution or taking any action in reliance on the contents of this information is strictly prohibited and may be unlawful. Mayberry may affect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.