JM | May 24, 2022

Tropical Battery further expanding this year

/ Our Today


Set to close at least one acquisition  by year end

(Photo: Facebook @TropicalBattery)

Durrant Pate/Contributor

Jamaica-based energy company Tropical Battery is on the move with further expansion planned for this year.

The company, which went public a year and a half ago, is now set on growth through acquisition this year and already has in sight a few companies.

The directors report that “we are getting closer with our efforts to acquire profitable companies and hope to have at least one of them closed before the end of this calendar year”.

In addition, Tropical Battery, which was listed on the Jamaica Stock Exchange in September 2020, is set on organic growth with plans being rolled out to increase its retail presence islandwide in the coming quarters. Regarding its half-year performance, the company is boasting of a 150 per cent growth in net profit, moving from J$34.5 million for six months in fiscal year 2021 to J$86.6 million for the first six months of this fiscal year 2022.

Tropical Battery’s Ferry Commerical Park offices on the outskirts of Kingston. (Photo: Facebook @TropicalBattery)

The management noted that “the net profit for the entire 12 months last year was J$88.3 million to which we have almost achieved in just six months of this fiscal year 2022. Earnings per share for the first six months of this fiscal year went from $0.03 a year ago to $0.07 per share”.

Diversification and expansion

Tropical Battery continues its diversification strategy selling more than just conventional lead acid batteries but also selling lithium ion batteries as well as renewable energy products, like solar panels, which is having a positive impact on the overall business. The expansion to include lithium batteries was executed after establishing a downstream partner in Kingston, Ontario-based Li-Cycle, North America’s largest Li-ion recovery company.

Revenues for the quarter were up 33.4 per cent, moving from J$476 million in the March second quarter of 2021 to J$635 million in the March second quarter of 2022. This positive increase of J$158 million was achieved through continuing to closely balance inventory arrivals, and incentivise the team to surpass targets by bringing in new customers from different markets like solar clients and international customers.

The company’s Grove Road branch in Kingston. (Photo: Facebook @TropicalBattery)

Each month for the quarter, Tropical Battery finished consistently higher than the previous quarter’s months, showing steady incremental growth. Gross profit came in at J$191.7 million or approximately 33 per cent above the same period last year.

The gross profit percentage was 30.2 per cent% of total revenue, which is slightly lower than same quarter of the previous year which was 30.25 per cent. Operating expenses has been climbing, coming in at J$140.4 million or 31.9 per cent above last year’s figure of J$106.5 million.

Serving more customers

Tropical is witnessing more customers, reaching over 27,500 customers this quarter, up from approximately 23,900 customers in the first quarter of 2021. Approximately 550 of these customers are small and medium-size enterprise (SMEs), which earn a significant share of their revenue by reselling Tropical Battery’s products.

The management said these valued resellers include independently owned gas stations, small auto parts stores, hardware stores and supermarkets.

On the negative side, Tropical Battery’s spent battery export sales fell to zero tons for the quarter from 175.1 metric tons in second quarter of 2021.

“This cost us approximately $45 million in lost revenue for the quarter, however, on the positive side, we continued to collect and purchase spent batteries which will be shipped out and sold later this fiscal year,” the management reported, pointing out that the vessel that usually transports their spent battery exports ceased its operations in the first quarter.

To date, no replacement vessel or alternate route for Tropical Battery’s cargo has been identified, resulting in the ‘no shipments’.

However, the company plans to begin exporting spent batteries again as soon as possible with the tentative resumption date set for May 2022.


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