August 15, 2024

Derrimon Trading Ltd(DTL)

Unaudited financials for the six months ended June 30, 2024:

Derrimon Trading Ltd (DTL) reported an 18% decrease in trading revenue totaling $7.81 billion for the six months ending June 30, 2024, compared to $9.50 billion in the corresponding period last year. Trading Revenue for the second quarter decreased 7% to close at $4.25 billion, compared to $4.58 billion for the comparable quarter of 2023.
The cost of sales amounted to $5.78 billion (2023: 7.33 billion), a significant decrease of 21% year over year, reflecting the company’s effective cost management. Consequently, gross profit decreased by 7% to $2.03 billion compared to $2.17 billion for the six months ended June 30, 2023. The company booked a gross profit of $1.12 billion for the second quarter versus $1.15 billion reported for the similar quarter of 2023.

Administrative expenses decreased by 20% to close at $1.07 billion (2023: $1.33 billion), a result of strategic decisions. Selling and distribution expenses increased by 25% from $300.14 million in 2023 to $376.50 million in the period under review. As a result, total operating expenses for the six months ended June 30, 2024, amounted to $1.44 billion, an 11% decrease relative to the $1.63 billion reported in 2023.
Operating profit before finance costs for the six months ended June 30, 2024, amounted to $717.84 million, a 6% increase relative to $675.63 million reported in 2023. Operating profit before finance costs for the second quarter amounted to $517.38 million (2023: $485.78 million). Finance costs totaled $581.01 million (2023: $446.53 million), a 30% increase from last year’s corresponding period. This increase was primarily due to the interest rate environment and increased borrowing over the period. Profit before taxation for the six months ended June 30, 2024, amounted to $136.84 million, a 40% decrease relative to $229.10 million reported in 2023. Profit before taxation for the second quarter amounted to $64.98 million (2023: $159.09 million).

Taxation for the six months ended June 30, 2024, decreased 46% to $16.00 million (2023: $29.78 million). Net Profit Attributable to shareholders for the six months amounted to $97.73 million, a 44% decrease from the $174.55 million reported in 2023. For the second quarter, Net Profit Attributable to shareholders was $42.39 million (2023: $134.01 million).
Consequently, Earnings Per Share for the six months amounted to $0.02 (2023: EPS: $0.04), while Earnings Per Share for the quarter totaled $0.01 (2023: EPS: $0.03). The twelve-month trailing EPS was $0.02, and the number of shares used in these calculations was 4,533,360,670.

Notably, DTL’s stock price closed on August 15, 2024, trading for $2.04 with a corresponding P/E ratio of 110.73x.

Balance Sheet Highlights

The company’s assets totaled $17.54 billion (2023: $16.70 billion). The increase in the company’s total asset base is attributable to a 29% YoY increase in “Inventories,” which ended the quarter at $5.84 billion (2023: $4.52 billion). The company also witnessed a 9% YoY increase in “Right of use Assets”, closing the quarter at $2.36 billion (2023: $2.17 billion) and a 4% YoY increase in “Fixed Assets” ending the quarter at $3.71 billion (2023: $3.59 billion).

Shareholder’s equity was $6.72 billion (2023: $6.31 billion), representing a book value per share of $1.48 (2023: $1.39).

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