Tropical Battery made a good start to 2021, posting positive results for its second quarter, as both profits and sales improved year over year.

In addition, the company, which went public in September last year through its successful Initial Public Offer (IPO) was able to overcome most of its supply chain problems. Revenues for the March quarter were up 7.5 per cent moving from $443 million in 2020 to $476 million in 2021.

This positive increase reflects some improvements in the company’s recent COVID-relayed supply chain delivery delays. Operating expenses came in at $106 million, which was 11.6 per cent below last year’s $120 million.

Earnings Before Interest, Taxes, Depreciation and Amortization (EBIDTA), which is a metric used to evaluate a company’s operating performance came in at $40.1 million or 49.6 per cent above last year’s $26.8 million. Net profit was up 314.4 per cent to $15.5 million.

Rising net profits for half-year performance

Additionally, total net profit for the first six months of the fiscal year, now stands at $34.5 million or 83.5 per cent above last year’s $18.8 million. Gross profit percentage came in at 30.8 per cent, which was below budget of 31.5 per cent and down compared to last year’s second quarter performance of 33.2 per cent.

This was a result of increases in shipping cost and one-off purchases from more expensive suppliers in order to obtain inventory quickly. Increases in lead prices annually also inflated all battery suppliers cost.

In light of the increased costs, Tropical Battery implemented a price increase during the period, however given the current economic environment; the company opted not to pass on the full cost increase. There were improvements in managing staff health, as it relates to Covid-19 and maximizing productivity during the shortened workdays.

During the quarter, Tropical Battery donated much needed batteries to the Bustamante Children’s Hospital to enable the restart of the generator, expressing appreciation to the team members that worked hard over the weekend to ensure that the batteries were installed and ready for use.

Missed gross profit percentage target

By the end of 2021 the management projects that the company should be back to 31.5 per cent or above of gross profit percentage, based on new and current supply chain agreements. Total Equity was up 4.7 per cent, moving from $735 million at the end of fiscal year September 30, 2020, to $769 million as at March 31, 2021.

The difference is attributed to increases in retained earnings. In his outlook, Managing Director Alexander Melville is expecting, “the second half of this fiscal year should be substantially better than the first. We continue to motivate team members, execute our strategic plan and leverage the attributes of being a public company, which generally focuses on looking for new products, new markets to enter and strategic acquisitions.”

Melville disclosed that the company will be accelerating activities related to the eStore project, which will allow customers to shop online and via a mobile app.

According to the Tropical Battery Managing Director, “we will also implement a phased product delivery and incorporate the mobile response application into the eStore platform. We plan to launch the eStore by June 2021.”