Derrimon Trading Company Limited reported revenues of JA$6.30 billion for the six (6) months ended June 30, 2020, JA$16.11 million more than the $6.29 billion reported for the corresponding six (6) months period in 2019.
Chairman and Chief Executive Officer Derrick Cotterell in his report to shareholders noted that the impact of the slow-down in economic activities and demand by consumers and manufacturers as a result of the Covid-19 pandemic was the main reason for the negligible growth experienced at the Group level. They were, however, encouraged by the continued growth that was reported by the retail segment of their business and by Caribbean Flavours and Fragrances Limited, which he noted speaks to the diversity of the Derrimon Group of Companies.
Despite the Covoid-19 pandemic, the Group he said continues to strategically execute on the revised Business Plan, which has resulted in significant growth in some areas of the business during the six (6) months period. The Group experienced steady growth in revenue in the retail segment and Caribbean Flavours and Fragrances Limited whilst the distribution segment remained flat. The subsidiary, Woodcats International, saw a reduction in business during the reporting period but is expected to see a rebound based on the reopening of many segments of the manufacturing sector in July 2020.
Derrimon Trading also reported a gross profit of $1.20 billion, which represents an increase of $105.38 million or 9.63% above the $1.09 billion reported for the comparative period last year. Consolidated Profit before tax of $207.47M
Consolidated operating expenses for the six (6) months period was $965.76 million representing an increase of $141.56 million (17.17%) over the $824.20 million reported for the same period in 2019. This increase was driven by the increases in lease payments, the depreciation of the Jamaican Dollar to the United States Dollars, trucking, and delivery charges, costs associated with the new warehouse, and utilities.
The realignment of the Group’s debt portfolio from short term to long term amortized facilities continues to have a positive effect on the Group by way of the lower interest cost.
The consolidated profit before tax earned for this reporting period was $207.47 million, an increase of $21.02 million, or 11.28% over the $186.45 million reported for the corresponding period in 2019. The Group net profit after tax was $183.89 million, which was an increase of $16.26 million or 9.70% above the $167.63 million previously reported.
The consolidated total assets less current liabilities were $4.18 billion compared to the $2.34 billion reported for the corresponding period in 2019.
Despite the improvements in the Company’s distribution strategies, improved efficiencies and greater availability of key products, the Covid-19 pandemic had an adverse impact on their distribution business during this period, he reported, noting that the six (6) months result of the distribution and retail arms of the business (core) recorded revenue of $5.71 billion, which is flat when compared to the $5.73 billion reported for the corresponding period last year. For this second quarter ended June 2020, revenue generated from core activity was $2.70 billion representing a decline of $151 million or 5.30% when compared to the $2.85 billion reported for a similar reporting period in 2019.
The retail arm of the business continues to do well and served to reduce the shortfall in revenue which
the company experienced.
Gross profit from these divisions for the six (6) months period was $1.03 billion million, which represents a $105.37 million or 11.45% increase above the $920.09 million reported for a similar period in 2019. Gross profit from core activities for the second quarter was $509.90 million and was $62.71 million or 14.02% more than the $447.19 million reported in a similar period in 2019.
Operating Expenses for the six (6) months period was $868.09 million, which was $127.41 million or 17.20% above the $740.68 million reported for the comparative period last year. For the second quarter ending June 30, 2020, operating expenses were $445.32 million, which was $76.43 million or 20.72% above the expenses incurred for a similar period in 2019.
The major factors for this increase as previously reported were increases in lease payments, the depreciation of the Jamaican Dollar to the United States Dollars, trucking and delivery charges, costs associated with the new warehouse, and utilities.
Finance charges from core activities for the six (6) months period was $67.79 million, down by $30.36 million or 30.93% from the $98.14 million reported in June 30, 2019. For the three (3) months ending June 30, 2020, the finance cost was $18.48 million, which was $21.11 million or 53.32% below that reported for the similar quarter in 2019.
Pre-tax Profit recorded for the six (6) months period was $119.07 million representing a $29.23 million or 32.54% increase over the $89.84 million reported for the corresponding period in 2019. For the three (3) months ended June 2020, pre-tax profit was $57.90 million which was $11.96 million or 26.03% above the $45.94 million reported for the corresponding period.
Net profit for the six (6) months period was $104.18 million which was $25.58 million or 32.54% above the $78.61 million reported for the same period last year. For the second quarter ending June 30, 2020, core operations generated a net profit of $50.66 million, which was $10.47 million or 26.05% above the $40.20 million reported for a similar period in 2020. It was noted that this year’s net profit includes taxation cost as this is Derrimon’s second year of making payment of 50% of corporate taxes on projected net profits.
Total Assets Less Current Liabilities for the Company was recorded at $3.94 billion or $1.95 billion (98%) more than the $1.99 billion reported for the similar period last year.
Derrimon Trading Company Limited closed the six (6) months ended June 30, 2020, with Earnings Per Stock unit of $0.059 an increase from $0.056.
Derrimon Trading Company Limited (DTL) – Additional Public Offering of Ordinary Shares Derrimon Trading has advised that at a meeting to be held on August 31, 2020 at 2:00 p.m., their Board will consider recommending to shareholders at the Annual General Meeting certain resolutions to facilitate raising additional equity investment by an additional public offering of ordinary shares.