Derrimon on track to record year
Improved performances across most subsidiaries of Derrimon Trading Company Limited pushed group profit up nearly 50 per cent in the third quarter, putting the company on track towards a record year for earnings.
Still, Caribbean Flavours & Fragrances Limited, which achieved a 24 per cent spike in revenue, failed to shine at the bottom line, which shrank by 13 per cent to $14.8 million on higher expenses.
It’s the only Derrimon subsidiary, like its parent, that’s listed on the stock market.
Overall, the group, which includes Derrimon, a joint retail operation and six subsidiaries, reported earnings of $196 million, up 46 per cent relative to the September 2021 quarter, amid the continued consolidation of newly acquired businesses, while group revenue climbed from 19 per cent to $4.9 billion.
Derrimon, the lead company, itself swung from a loss of $33 million to profit of $23 million. Its turnover was equivalent to nearly 60 per cent of group sales.
The strong third-quarter earnings puts Derrimon Group, which is in the business of trading food products, grocery retail, production of food flavours and spices, and pallet making, on track to hit or surpass half-billion in profit by year end, having so far achieved nine-month earnings of $482 million. It’s already eclipsed the full-year results of $448 million in 2021.
Over the past year, Caribbean Flavours has been working to build local and export sales, the result of which management said were reflected in its September quarter results. Moving into the final quarter, the company which recently brought to market three new food flavourings: mixed berry, tropical surprise, and yaad blend – which is a blend of mango, pineapple and ginger – expects sales to remain on a growth trajectory, largely due to the business from a large overseas client it secured during the year.
Caribbean Flavours, whose product portfolio spans flavourings for beverages, including syrup, sanitisation fragrances, baking and ice cream additives, and essential oils, currently has a foothold in export markets in Barbados, St Kitts-Nevis, Trinidad & Tobago, Guyana, Grenada, Suriname, Canada and the Dominican Republic.
The company is collaborating with New York-based speciality supermarket and food distributors FoodSaver New York and Good Food for Less as new channels to distribute its sorrel, ginger beer, homemade lemonade and pink lemonade concentrates. The New York retailers are also owned by Derrimon Trading.
In reporting on the performance of the New York-based businesses, Chairman and CEO of Derrimon Group Derrick Cotterell said that after a slow start to the year, both businesses recorded improvements in the third quarter.
Its pallet-making company Woodcats International is said to have surpassed its budget and the 2021 financial year performance, while new additions to the group – Arosa and Spicy Hill – contributed moderately to the quarterly results.
In January, Derrimon purchased 100 per cent of manufacturer Spicy Hill Farms, which trades in dried agricultural products, soup and spice mixes; then acquired 100 per cent of St Ann-based meat-processing company Arosa Limited in April.
During the quarter, Derrimon’s finance costs jumped 231 per cent to $267 million against the background of new borrowings to fund the $932-million acquisition of Arosa; complete the new flagship Select Grocers Store in Millenium Mall, Clarendon; alongside the roll-out of a new line of Delect products, which will be retailed in its US and local stores.
The company recently added callaloo, ackee, coconut milk, lime juice, breadfruit slices, bammy, sorrel, ginger beer and lemonade concentrates to the Delect line of products, a move expected to bring in annual revenues of $2 billion to the company. Derrimon also recently disclosed its intention to purchase a third retail and distribution business in the United States.