Derrimon signs $625-M loan facility

Wednesday, June 13, 2018

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Derrimon Trading Company Ltd on Monday advised that it has signed off on a $625-million loan facility.

The syndicated facility was arranged and structured by Sagicor Bank Jamaica Limited and First Global Bank Limited, and amortised over a period of 10 years. Derrimon also noted that the loan will be utilised to fully liquidate current short-term debts of the company and immediately lower the company's net interest expense.

Earlier this year Derrimon listed 175 million preference shares at $2.00 per share, which raised $350 million for the company. The funds went mainly towards paying out an existing 125-million, 11.75 per cent redeemable preference share offer the company made in March 2015 when it raised $250 million, with the remainder going towards general corporate purposes.

Shareholders at Derrimon's extraordinary general meeting in March approved a resolution for the creation of 400 million additional shares to 800.4 million units, and also voted to designate the newly created capital as redeemable preference shares.

The shareholders also granted Derrimon's board the authority to issue those shares from time to time. Derrimon's capital structure now includes 275.4 million ordinary shares and 525 million redeemable preference shares.

For the first quarter ending March 2018, Derrimon Trading results reflect revenue from core activities of $1.850 billion, or $412 million (28.66 per cent) over the $1.438 billion reported for the corresponding three-month period in 2017.

Revenue for the quarter was $1.939 billion — or 26.98 per cent above the $1.527 billion reported for the prior period. Net profit recorded for the three-month period from core business was $41.867 million, representing a $12.59-million or 43 per cent increase over the $29.277 million reported for the corresponding period in 2017.

The consolidated net profit earned for this reporting period was $57.566 million, an increase of $16.289 million or 39.46 per cent over the $41.277 million reported. Gross profit from core operations reported for the period was $318.789 million or 30.78 per cent above the $243.756 million reported for the same period in 2017.

The growth reflects a combination of improvement in margins arising from strategies employed within both the distribution and retail segments of the business, the positive impact from the culled distribution portfolio, and improved margins from growth of the supermarket portfolio.

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