Derrimon Trading Limited (DTL) group continues to weather the challenging economic climate, recording a mixed performance for the nine-month period ended September 2023.
The distribution led group has reversed the modest pre-tax profit of J$101.04 million made during the combined three quarters of 2022 to post a pre-tax loss of J$123.37 million the period under review. The net loss for the nine-month period closed on J$123.37 million compared to the net profit of J$81.58 million for similar period last year.
On the positive side, revenues went up to J$14.09 billion which is J$285.53 million more than the J$13.81 billion reported for the same period in 2022. The improved performance has been credited to the growth strategy being achieved throughout the subsidiaries and business segments.
During the period, DTL’s general insurance cost for both the local and international business increased by just over 45 per cent in addition to the observance of similar cost in the areas of security, as well as the carrying cost impact from the restructuring of its distribution business. DTL also experienced higher depreciation charges as well as higher lease cost related to IFRS 16.
Higher levels of depreciation also occurred due to increased assets associated with the new Select Grocers store in May Pen.
Record quarterly revenue performance by subsidiaries
The subsidiary companies of Caribbean Flavours and Fragrances Limited and Woodcats International Limited achieved record quarterly revenue performance and continue to grow into new market segments. The other subsidiaries, namely Arosa, Spicy Hill, and Marnock all contributed positively to the combined nine-month revenue albeit below budget for the period.
CEO Derrick Cotterell is confident of continued growth in the coming quarters.
“We continue to see growth in our new Select Grocers in Clarendon and remain optimistic that the programmes that we are introducing will yield the desired result. The distribution business continues to see growth in our proprietary brand portfolio and is rapidly gaining market acceptance,” Cotterell advised shareholders in the company’s latest quarterly report.
Total assets from core activities closed on J$11.84 billion, which represents an increase of J$332.40 million or 2.88 per cent above the J$11.51 billion reported for the similar period last year. Cash and bank balances increased by J$109.32 million or 197.50 per cent from J$55.35 million to J$164.67 million during the reporting period.
Total liabilities increased from J$6.12 billion or five per cent to J$6.43 billion during the reporting period.
Expenses inched up
Consolidated operating expenses for the nine month was J$2.42 billion, representing an increase of J$126.98 million (5.53 per cent) over the J$2.30 billion reported for the comparative period last year. The increased expenses reflect the new Select Grocers and the full integration of increased cost in all the business.
The major factors for this increase were general insurance, security costs, higher operational cost, higher depreciation charges and other increased costs. Finance charges for the core activities for the period under review was J$606.13 million compared to J$254.68 million, a 138 per cent increase over the prior period.
This was due to the company refinancing certain loans along with the financing cost for prior acquisitions being reflected in the period. Additionally, the full adoption of IFRS 16 for all leases would have impacted the results.