Durrant Pate/Contributor

Marked by rapid growth driven through strategic acquisitions and enhanced operational efficiencies, Tropical Battery delivered an exceptional third-quarter financial result for the April to June quarter in which revenues surged by 143.6 per cent year-over-year.

Gross operating revenues reached $1.9 billion for the quarter coming from $782.8 million for the same period last year. This growth is primarily attributed to the 100 per cent acquisition of Rose Batteries in San Jose, California, and the 51 per cent acquisition of Kaya Energy in the Dominican Republic. 

These strategic moves have significantly contributed to Tropical Battery’s growth trajectory. Gross profit for the quarter closed on J$623.3 million, up 172.6 per cent from the previous year. This indicates higher sales volumes, improved cost efficiencies, and favourable pricing strategies. 

Earnings before interest, taxes, and amortization (EBITA), which is a measure of company profitability used by investors, rose to J$255.1 million for the quarter under review, representing, a 272.8 per cent increase year-over-year, which the directors say underscores the company’s ability to optimise cost structures and enhance profitability from core operations.

Net income for the quarter more than doubled to J$121.3 million, up 212.5 per cent from last year. This shows our effective expense management and execution of growth strategies. Additionally, ‘Return on Equity’ for the quarter was 38.7 per cent, reflecting robust financial health and efficient management.

Management’s glowing assessment

CEO Alexander Melville and chief operation officer Daniel Melville, say, “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.”

They contend that the acquisitions of Rose Batteries and Kaya Energy have been instrumental in driving this impressive growth, reflecting the strategic focus on expanding market presence and enhancing product offerings.

The integration of Kaya Energy and Rose Batteries has expanded the company’s market presence and brought in advanced technological capabilities and a wealth of expertise, increasing the team to 185 outstanding members.

This is in addition to the significant improvements in operational efficiencies across the board. The seamless integration has enhanced operational collaborations and efficiency, contributing to the overall positive financial performance, which has manifested itself in an improvement in the inventory turnover ratio—which moved from 2.5 to 3.5.

Meanwhile, the cash conversion cycle was reduced significantly to 109 days from 148 days, highlighting enhanced management of working capital. On the negative side, selling expenses rose by 74.1 per cent moving from J$472 million to J$821 million, due to expanded operations. 

Despite these costs, after-tax profit for the nine months increased by 65.8 per cent to J$220 million with the management’s cost containment strategies being instrumental in achieving higher gross profit and EBITDA margins. 

Pushing for future growth

As the management sets its sights on future growth, the company has completed its Ferry location’s statutory equipment inspection certification and submitted it to the Ministry of Labour. Additionally, Tropical Battery has submitted the renewal application for its factory re-registration and successfully underwent a site inspection by the Ministry of Labour. 

Also, its public procurement certification was renewed, enabling the company to bid on government contracts.

The Melvilles say “Tropical Battery 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 (profit after-tax) above 10% by leveraging our group entities’ strengths and innovative technologies is more aligned than ever.”