Alexander Melville Chief Executive Officer Tropical Battery Company Limited Has Released The Following Interim Report To Shareholders Q3 Fy2024 (April 1, 2024 To June 30, 2024)
Financial Highlights
For the Quarter April 1 to June 30, 2024
For the third quarter of 2024, we reported exceptional financial results, with gross operating revenue reaching $1.9 billion from $782.8 million last year, an increase of 143.6% year-over-year. This growth is primarily attributed to the 100% acquisition of Rose Batteries in San Jose, California, and the 51% acquisition of Kaya Energy in the Dominican Republic. These strategic moves have significantly contributed to our growth trajectory.
Our gross profit for the quarter was $623.3 million, up 172.6% from the previous year. This indicates higher sales volumes, improved cost efficiencies, and favourable pricing strategies.
The quarter’s EBITDA was $255.1 million, a 272.8% increase year over year, which underscores our ability to optimise cost structures and enhance profitability from core operations.
Net income for the quarter more than doubled to $121.3 million, up 212.5% from last year. This shows our effective expense management and execution of growth strategies. Additionally, our Return on Equity (ROE) for the quarter was 38.7%, reflecting robust financial health and efficient management.
For the 9 Months YTD
Our financial performance saw material growth for the first nine months of FY2024, with gross operating revenue doubling from $2.13 billion in the previous year to $4.27 billion.
Gross profit rose by approximately 104% from $667 million to $1.36 billion. Operating profit has increased 136% from $195 million to $460 million, underlining good operational management and strategic execution. This was supported by notable non-recurring acquisition-related costs of approximately $77 million, reflecting our strategic investments for long-term growth. Additionally, administration, marketing, and selling expenses rose by 74.1%, from $472 million to $821 million, due to expanded operations.
Despite these costs, our Profit After Tax (PAT) for the nine months increased by 65.8% to $220 million.
This financial summary underscores Tropical Battery Company Limited’s year-to-date performance, which is marked by revenue growth, cost management, and profitability. This position puts the company on a solid path toward achieving its long-term financial targets.
The acquisitions of Rose Batteries and Kaya Energy have been instrumental in driving this impressive growth, reflecting the company’s strategic focus on expanding its market presence and enhancing its product offerings.
Industry Update
In 2024, the energy storage and renewable energy industries are witnessing noteworthy growth, driven by healthy investment, technological innovation, and strong policy support.
Energy Storage Industry
The energy storage sector is experiencing expansion, highlighted by a 3.56% increase in companies globally, totalling 13,900, and the addition of 114,000 new jobs, bringing the workforce to 1.7 million.
Investment remains vibrant, with an average funding round value of $84 million across over 5,230 rounds. Technological advancements are robust, with 31,700 patents filed focusing on battery technologies, supercapacitors, and grid storage systems. Notably, prices for lithium-ion batteries and energy storage systems are expected to decrease, benefiting both the electric vehicle and stationary storage markets.
Renewable Energy Industry
The renewable energy sector is also expanding, with a 2.45% growth and an employment surge to 8.2 million globally. The industry sees substantial funding, with over 25,000 rounds recorded and significant technological advancements in modular electrolyser systems, distributed energy resource management, and advanced photovoltaics. Supportive policies and large infrastructure investments are enhancing grid resilience and accelerating the deployment of renewable technologies.
Both industries benefit from the involvement of major investors and a conducive regulatory environment, positioning them as key drivers in the global shift toward sustainable energy solutions.
Strategic Developments
Our strategic acquisitions have played a crucial role in our growth this quarter. The integration of Kaya Energy and Rose Batteries has expanded our market presence and brought in advanced technological capabilities and a wealth of expertise, increasing our team to 185 outstanding members.
We have seen significant improvements in operational efficiencies. Our cost management strategies have been instrumental in achieving higher gross profit and EBITDA margins. The seamless integration of our recent acquisitions has enhanced operational collaborations and efficiency, contributing to our overall positive financial performance.
Key Performance Indicators (KPIs)
Operational efficiencies have seen significant improvements across the board. Our inventory turnover ratio improved from 2.5 to 3.5, and the cash conversion cycle was reduced significantly to 109 days from 148 days, highlighting our enhanced management of working capital.
ESG
Our commitment to Environmental, Social, and Governance (ESG) principles remains strong. We completed essential regulatory compliances and continued our community engagement and environmental stewardship efforts. We collected and recycled significant amounts of plastic and participated in community-enriching activities, including beach clean-ups and educational support.
Our dedication to safety, compliance, and continuous improvement was evident this quarter through several vital achievements. We completed our Jamaica Ferry location’s statutory equipment inspection certification and submitted it to the Ministry of Labour. Additionally, we submitted the renewal application for our Factory Re-registration and successfully underwent a site inspection by the Ministry of Labour.
Our Public Procurement Certification was also renewed, enabling us to bid on government contracts. Our corporate social responsibility initiatives demonstrated our commitment to sustainability and community support. As part of our waste management program, we collected and recycled 166 pounds of plastic bottles, reducing environmental impact. We also collected and exported 203 metric tons of lead-acid spent batteries, filling ten 20-foot containers.
We also supported the Little Einsteins Learning Centre by sponsoring trophies and awards for their graduation ceremony.
Collaborating with Tropical Renewable Energy and the JPS Foundation, we participated in a beach clean-up exercise, underscoring our commitment to environmental stewardship. Additionally, we sponsored Labour Day projects, including a beautification project in Montego Bay and a tree-planting exercise at the Hydel Group of Schools.
Outlook
Looking forward, Tropical Battery Company Ltd. is set on maintaining a robust growth trajectory with a strategic focus on expanding our operations, optimising efficiency, and exploring new market opportunities. Our goal to achieve consistent double-digit revenue growth and elevate PAT above 10% by leveraging our group entities’ strengths and innovative technologies is more aligned than ever.
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