Increased nine-month profit for Derrimon TradingFriday, November 20, 2020
BY ABBION ROBINSON
Food products and distribution company Derrimon Trading Company Limited reported an unaudited net profit of $280.66 million for the nine-month period ended September 30, 2020.
The consolidated results represent an increase of $59.54 million or 26.9 per cent above the $221.12 million reported for the previous corresponding period.
However, revenues for the period under review was relatively flat due to COVID-19 and amounted to $9.62 billion, 1 per cent over than the $9.53 billion reported for the previous corresponding nine-month period.
For the period under review, the group was able to realign its debt portfolio from short-term to long-term amortised facilities. This was influenced by the switching of US dollar loans to Jamaican dollar facilities and the renegotiation of interest rates, which resulted in a $13.34 million or 8.4 per cent reduction for the financial year to date when compared to the corresponding period in 2019.
Consolidated operating expenses for the nine-month period totalled $1.44 billion, representing an increase of $176.20 million or 13.9 per cent over the previous corresponding period. This was influenced by increased rental expenses in relation to the new distribution centre, salaries and wages, utilities which were impacted by the depreciation of the Jamaican dollar, and other operational costs driven by the COVID-19 sanitation regime.
Reporting to shareholders, Chief Executive Officer (CEO) Derrick Cotterell attributed the group's improvements to a combination of factors which include improvement in the procurement and logistics process, as well as a focus on higher yielding products.
“On the whole, the results for the nine months of 2020 are encouraging for our business despite the global pandemic which has resulted in an economic slowdown and has negatively impacted some aspects of our business,” he said.
“We will continue to execute our strategy and adopt all the safety measures being initiated by our internal team as well as our Government whilst monitoring and managing each element of risk despite the many challenges, we remain confide that we have the right talent and leadership to deliver on our plans for the ensuing periods,” the CEO continued.
According to Cotterell, despite the negative impact of the coronavirus pandemic, the nine months results of the distribution and retail arms of the business recorded revenue of $8.74 billion, $53.63 million more than the $8.69 billion reported for the previous corresponding period.
Net profit for the period under review amounted to $167.72 million, 51.3 per cent or $64.99 million higher when compared to the corresponding period last year.
For the third quarter ended September 2020, revenue generated from core activity was $3.029 billion representing a growth of 2.5 per cent over the $2.96 billion reported for the corresponding reporting period in 2019.
This growth, Cotterell indicated, was influenced and stabilised by the retail arm of the business.
“The impact from the closure of schools, entertainment sector and commerce in general has negatively impacted the sales of the beverage portfolio. However, we continue to see growth in the bulk goods, cold storage and other dry categories and we are encouraged by this quarter's performance,” he said.
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