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Derrimon sees 51% profit hike

Derrimon Trading Company Limited reported consolidated revenue of $9.62 billion, an increase of $0.88 million or one per cent, for the nine months ended September 30.

Derrimon’s subsidiaries are involved in manufacturing of flavours and fragrances and wooden pallets.

However, net profit for the period was $167.72 million which was $64.99 million (51.31 per cent) higher when compared to the same period last year.
Earnings per share unit came out at 0.06 cents compared to 0.04 cents at September 2019.

The increase realised for the nine-month period were primarily attributed to improvement in the procurement and logistics process as well as a focus on higher yielding products, management stated.

The principal activities of the company include the wholesale and bulk distribution of household and food items inclusive of meat products, chilled and ambient beverages and the retailing of those and other food items and meat products through the operation of a chain of outlets and supermarkets.

The company’s two subsidiaries are involved in manufacturing of flavours and fragrances and wooden pallets.
Core operations (distribution and retail) generated net profit of $63.53 million which is $31.29 million (97.07 per cent) greater than the $32.24 million reported for the similar period for 2019.

Derrimon management said revenue growth was stymied by the impact of the COVID-19 pandemic and was relatively flat when compared to the prior year.

The Group reported gross profit of $1.84 billion which represents an increase of $181.60 million (10.95 per cent) above the $1.66 billion reported for the comparative period last year.

Consolidated operating expenses for the nine months period was $1.44 billion representing an increase of $176.20 million (13.92 per cent) over the $1.27 billion increase reported for the same period in 2019.

Management said this was influenced by increased rental expenses in relation to the new distribution centre, salaries and wages, utilities which were impacted by the depreciation of the Jamaican dollar and other operational costs driven by the new sanitation regime given the requirements of the COVID-19 pandemic.

They commented, “The realignment of our debt portfolio from short term to long term amortised 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.”

This has resulted in a $13.34 million or 8.37 per cent reduction for the financial year to date when compared to the similar period in 2019.
 The consolidated total assets less current liabilities was $3.89 billion compared to the $3.08 billion reported for similar period in 2019, an increase of 26.25 per cent.

The distribution and retail arms of the business recorded revenue of $8.74 billion which was $53.63 million (0.62 per cent) more than the $8.69 billion reported for the corresponding period last year.
For the third quarter ended September 2020, revenue generated from core activity was $3.029 billion representing a growth of $72.641 million (2.46 per cent) over the $2.96 billion reported for the similar reporting period in 2019.

Management said this growth was influenced and stabilised by the retail arm of the business.
Meanwhile, the impact from the closure of schools, entertainment sector and commerce in general has negatively impacted the sales of the beverage portfolio.

Management said they continue to see growth in the bulk goods, cold storage and other dry categories and are encouraged by the quarter’s performance.

For the three months ended September 30, 2020, pre-tax profit was $72.61 million or $35.76 million (97.07 per cent) greater when compared to the $36.86 million reported for the corresponding period.
Total assets less current liabilities was at $3.62 billion, a growth of $904.26 million (33.36 per cent) when compared to the $2.71 billion reported for the similar period last year.