Derrimon profit shrinks in Q1
Derrimon Trading Group earnings plummeted to $53 million in the first quarter ending March, a performance that reflected costs to operate the expanding business.
The company, which has been in growth mode for some two years, reported a 120 per cent drop in earnings for the first quarter, compared with the similar period of 2022, amid revenue growth of 16 per cent to nearly $5 billion.
Executive Chairman Derrick Cotterell said the increase was mainly due to the impact arising from the consolidation of its new subsidiary, Arosa Limited, along with the buildout of a new Select Grocers store in Clarendon.
Other notable increases were seen in utilities, salaries, distribution costs, and new operating costs from some of its other subsidiaries, the company said.
Derrimon and its six subsidiaries continued to navigate logistics and supply chain challenges, which Cotterell said negatively affected the business in the quarter.
“The delays experienced with supplies and the influx of orders from many of our suppliers at once impacted our bottom line due to excess demurrage, along with the cost for extra off-site storage. Our resilience and strength as a company allowed us to navigate that storm despite the operational and financial challenges,” he said.
Cotterell does not foresee the dip in earnings continuing for much longer, largely on what he says are “strategic initiatives” the company is working on.
“We anticipate that these costs will reduce in the upcoming quarters, based on the strategic initiatives that are upcoming,” he added.
Last year, Derrimon purchased 100 per cent of manufacturer Spicy Hill Farms, which trades in dried agricultural products, soup and spice mixes; and later acquired 100 per cent of St Ann-based meat-processing company Arosa Limited last April.
The company rang in year 2023 with the a newly completed flagship Select Grocers store in Millennium Mall, Clarendon, alongside the roll-out of a new line of Delect products, which will be retailed in its New York-based speciality supermarket and food distributors FoodSaver New York and Good Food for Less, and local stores Sampars Cash and Carry and Select Grocers.
“The full reposition of our distribution business was accelerated at the beginning of 2023 through the introduction of many products under the Delect brand. We are very encouraged, based on the market acceptance thus far, that the decision and timing was correct,” Cotterell said.
“The continued redefining of this business unit and ensuring that our proprietary brands attract additional world-class principals will ensure the long-term sustainability and growth in profitability,” he added.
The group’s other businesses are pallet-making company Woodcats International and Caribbean Flavours and Fragrances Limited.