August 13, 2021
Derrimon Trading Limited (DTL), for six months ended June 30, 2021, reported trading income of $8.05 billion compared to the $6.30 billion booked for the prior year’s comparable period. DTL indicated, “The improved performance is attributable to the aggressive implementation of revenue growth strategies employed by all companies and business segments within the Group; namely manufacturing, distribution and retail.”
Management also noted, “Despite the negative impact of the Covid-19 measures, logistical challenges, raw materials shortages and delays from our overseas suppliers and partners, total revenues increased, resulting in year over year improvements.”
Cost of sales increased by 28% to $6.51 billion for the period (2020: $5.10 billion). As a result, Gross profit amounted to $1.54 billion relative to $1.20 billion for the prior comparable period, an increase of 28% year over year. Gross profit for the three months ended June 30, 2021, rose 34% year over year to $787.14 million (2020: $586.86 million).
Other income for the period under review rose 2% to $42.25 million relative to $41.46 million booked in the prior comparable period.
Total operating expenses totaled $1.21 billion for the period under review, representing a growth of 26% on the $965.76 million recorded in the prior year’s corresponding period. Of this, administrative expenses amounted to $995.26 million, 28% higher when compared to the $776.84 million in 2020. Selling and distribution expenses recorded a 15% increase for the period, totaling $218.04 million (2020: $188.93 million). Total expenses for the quarter posted a 30% increase from $492.38 million in 2020 to $638.53 million for the three months ended June 30, 2021.
For the quarter, finance cost closed at $46.41 million versus $67.79 million in the 2020, a 32% decline year over year.
Consequently, profit before taxation grew to $321.42 million compared to $207.47 million in 2020. After incurring tax charges of $35.61 million (2020: $23.59 million), net profit amounted to $285.81 million, a 55% growth when compared to $183.89 million reported for the first six months of 2020. Net profit attributable to shareholders amounted to $271.39 million compared to $160.66 million recorded in 2020. Net profit attributable to shareholders for the quarter closed at $116 million relative to $69.04 million documented for the second quarter of 2020.
Earnings per share (EPS) for the quarter closed the period at $0.026 (2020: $0.015), while EPS year to date amounted to $0.060 (2020: $0.059). The twelve months trailing earnings per share amounted to $0.086. The total number of shares used in the computation amounted to 4,533,360,670 units. Notably, DTL closed the trading period on August 12, 2021 at a price of $2.34 with a corresponding P/E of 27.16 times.
DTL noted, “The results for the first six (6) months of 2021 are very encouraging for our business and marks a notable time in our history. Despite the spike in shipping costs, supply chain disruptions and various logistical hurdles, we achieved significant increases in sales and profits. The continuing depreciation of the Jamaican Dollar is of concern, hence the launch of Marnock LLC is not only timely but also important in our exchange risk mitigation strategy. Notwithstanding the challenges, we remain committed to growing the businesses for the benefit of our shareholders and delivering a high-quality service to our customers.”
Balance Sheet Highlights:
As at June 30, 2021, the Company’s assets totaled $10.16 billion (2020: $5.77 billion), 76% more than its value as at June 30, 2020. This was due to largely to increases in ‘Inventories’ and ‘Investment in Subsidiary’ which closed at $2.97 billion (2020: $1.48 billion) and $1.37 billion (2020: nil), respectively.
Total Shareholders’ Equity totaled $5.42 billion (2020: $1.33 billion), which translated to a book value of $1.98 (2020: $0.49)
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 effect transactions or have positions in securities mentioned herein. In addition, employees of Mayberry may have positions and effect transactions in the securities mentioned herein.