Durrant Pate/Contributor

Tropical Battery attained a record-breaking revenue performance during its just-released third quarter results, which ended for the company in June.

Gross operating revenue came in at a record J$782.8 million, reflecting an increase of 18.3 per cent compared to J$661.8 million for the comparable period in 2022 and a new quarterly high. This can be attributed to the positive impact of the company’s expansion into the Dominican Republic through its acquisition of Kaya Energy Group. 

The integration of this new market into Tropical Battery’s operations has proven to be a strategic and fruitful endeavour, particularly as the company completes its fourth quarter. The management is reporting that when the nine-month performance is taken into account, Tropical Battery’s revenue increased by 8.9 per cent, from J$1.95 billion in 2022 to J$2.13 billion in 2023. 

Gross profit up but net profit down 

Gross profit amounted to J$228.7 million, surpassing the previous year’s figure by J$21 million or approximately 10.0 per cent above Q3 of FY2022’s figure of J$207.6 million. However, the 30.0 per cent gross profit margin is below the corresponding period in FY2022. The net profit came in at J$38.8 million down from the $53.8 million booked from Q3 FY2022. 

According to the management team, “while we are disappointed with our net profit, because of some one-time cost and expenses that should not repeat moving forward. Despite the company’s operational profitability experiencing a dip, our strategic investments and financing decisions have boosted its cash position. The company’s approach is growth-oriented, as evidenced by its significant investments, but it’s crucial for the firm to ensure this growth translates into improved operating cash flows in the future.”

At the same time, the management continues to invest in its expansion plans to different markets with the goal of being accretive to shareholder value, customers, team members and stakeholders. Overall, Tropical Battery has made aggressive moves, like its 51 per cent acquisition of shares in Kaya Energy and the consistent monitoring and strategic adjustments, which will be essential to ensure long-term success. 

Substantial financial progress

Reflecting on the latest quarterly financials, the management commented, “our financial position displays substantial progress, characterised by notable growth in assets, a positive shift in liabilities, and a resilient approach to cash flow management. Despite the increase in current liabilities, the net current assets experienced a growth of 23.76 per cent over the year and 19.44 per cent over the nine months, indicating sound financial health.”

The shareholders’ equity displayed a healthy growth of 13.0 per cent from June 2022 to June 2023, reflecting stronger equity positioning of the company. Management explained that it remains resolute in its pursuit of a strong financial foundation that underpins our strategic objectives and long-term sustainability. 

The balance sheet expansion indicates that the company has been growing its operations with notable increases in both assets and liabilities. The growth in shareholders’ equity implies the company has been profitable and is retaining those earnings.