Shift toward higher-margin product lines within energy segments

Durrant Pate/Contributor

Tropical Battery Group is showing a big turnaround of J$252.4 million for its combined three quarters of 2026 having struggled through the latter part of 2025.

Operating profit for the nine months ended June 30, 2026 rose to $499.4 million, up 80.4% ahead of the prior period, while EBITDA closed on $573.8 million, more than doubling the J$285.0 million recorded the same time last year. The Group returned a net profit of $85.7 million for the period under review, reversing the restated net loss of J$166.6 million in 2025, a turnaround of $252.4 million. 

Earnings per stock unit for the nine months amounted to $0.037, compared with a loss per stock unit of $0.113 in the prior period. Cost of sales for the nine months went down by 3.7% to J$2.95 billion, despite a 5.1% increase in revenue. 

This reflects sustained work on procurement and supplier mix, including improved terms negotiated across the group’s principal battery suppliers and a shift toward higher-margin product lines within both the energy storage and renewable energy segments. 

Containing costs while boosting exports

Improved realisations in the spent battery export programme, where average selling prices rose to US$965 per tonne from US$538 per tonne in the comparable period, further contributed to the margin improvement. Operating expense discipline was a feature of the quarter, as costs were held to a minimum. 

Administration, marketing and selling expenses of $423.5 million were broadly level with the $422.0 million recorded in the third quarter of the prior year, a slight increase of 0.3%. The Group achieved a sequential reduction in operating expenses compared with the second quarter of the current year, as cost management measures implemented during the first half of 2026 took effect.

Tropical Battery’s renewable energy business continued to build scale, contributing revenue of $571.5 million and operating profit of $131.8 million for the nine months across its Jamaican and Dominican Republic operations with a growing order book of commercial and industrial solar projects. The American subsidiary also delivered improved profitability with net income for the combined quarters substantially ahead of 2025 on a broadly similar revenue base. 

Sale and lease back arrangement $69.1 million

Other operating income of J$74.4 million for the nine months includes non-recurring items of $69.1 million arising from the sale and leaseback transaction for Tropical Battery’s Lot 12 Ferry property while the balance of the Group’s improvement is due to trading performance rather than to one-off gains. Net finance costs of J$306.8 million for the nine months remain the principal constraint on reported earnings.

The completed sale-and-leaseback transaction realised proceeds of approximately $977.9 million, which took place during the just past quarter. The proceeds were applied principally to the settlement of amounts due to a fellow subsidiary to the reduction of short-term borrowings, and to working capital. 

At June 30, 2026, the Group held net current assets of $1.046 billion and shareholders’ equity attributable to owners of the company of J$1.68 billion. Amounts due to a fellow subsidiary stood at $31.8 million and short-term loans at $978.4 million. 

The leaseback has been recognised as a right-of-use asset of $679.5 million, with corresponding lease liabilities of $703.9 million.  

Segments performance

Both of the Group’s reportable segments contributed to the improved result. The Energy Storage segment recorded revenue of $4.29 billion and operating profit of $361.7 million for the nine months. 

The Renewable Energy segment recorded revenue of $571.5 million and operating profit of $131.8 million, continuing the growth trajectory established in the first half. The Group continues to invest in its renewable energy platform across Jamaica and the Dominican Republic, as well as in technology and automation initiatives across its Jamaican operations. 

Tropical Battery is entering the final quarter of the 2026 financial year with a strengthened liquidity position, improved margins and a growing renewable energy order book, with the Directors anticipating closing the year ahead of the prior year on both revenue and earnings.