Tropical Battery upbeat as Q1 revenue near doubles, but expenses go higher



For the first quarter ended December 31, 2024, Tropical Battery Company Limited nearly doubled its gross operating revenue to J$1.61 billion, a 99.5 per cent year-over-year increase.

However, despite the strong top-line performance, profitability was challenged due to rising costs, increased finance expenses, and ongoing investments.

While overall sales performance increased, subsidiary Rose Batteries' sales were below budget due to the cyclical impact of the U.S. election cycle. Management said it is expecting a rebound in upcoming quarters.

For The Tropical Battery group, gross profit increased by 119.9 per cent, reaching J$543.36 million and gross profit margin expanded to 33.7 per cent from 30.5 per cent.

However, operating expenses—particularly in administration, marketing, and selling—grew sharply by 149.7 per cent, impacting overall profitability.

Net profit fell by 50.9 per cent to J$35.5 million, primarily due to a 569.5 per cent rise in finance costs, significantly affecting bottom line. This was mainly driven by increased debt servicing expenses.

It is expected that this debt will be paid down considerably by the cash raised from the upcoming secondary public offering, targeted to close before March 31.

Tropical Battery achieved revenue growth of nearly 100 per cent, reflecting expanded sales, acquisitions, and new market penetrations.

Cost of goods sold increased 90.5 per cent to J$1.07 billion, slightly lower than revenue growth.

Management commented, “Notwithstanding current profitability challenges, Tropical Battery’s strong revenue growth and strategic investments indicate a solid market position with long-term potential.

“Our secondary offering is expected to be completed before the end of March 2025, which will significantly lower our debt costs—by more than half—and strengthen our balance sheet.”

In its industry update, the company notes that the energy storage, renewable energy, and electric vehicle (EV) industries are experiencing significant growth, driven by technological advancements and policy support.

The global energy storage market is projected to expand from USD 416.02 billion in 2025 to USD 841.19 billion by 2033, reflecting a compound annual growth rate (CAGR) of 9.2 per cent.

Meanwhile it also notes that the EV market, another Tropical Battery market target, is expanding swiftly. In 2023, electric cars accounted for approximately 18 per cent of all vehicles sold globally, up from 14 per cent in 2022 (International Energy Agency, 2024). Projections indicate that by 2024, 25 per cent of all new passenger car registrations will be electric, surpassing 17 million units in sales worldwide (GreenMatch, 2024).

Caribbean Money Daily

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