Tropical Battery’s 9M Earnings Performance Dims as Costs Amp Up

  • For the three months ended June 30, 2025 (Q3 2025), Tropical Battery Limited (TROPICAL) posted a net loss of J$53.11Mn (vs. profit J$121.35Mn in 2024) mainly due to lower revenues and higher operating expenses.
  • Revenues for the period totalled J$1.46Bn, a sharp 23.3% contraction from the outturn a year earlier. Management attributed the falloff to seasonal fluctuations in demand. The transition to a larger warehouse and manufacturing site in California impacted order fulfillment, and certain projects in the renewables segment, which are now expected to close in Q4 2025, also contributed to the weaker topline.
  • In line with the falloff in revenues, direct costs fell 27.2% (-J$349.49Mn). Consequently, while gross profit dipped to J$527.70Mn (-15.3%), the gross profit margin improved to 36.1% up from 32.7% in Q3 2024.
  • Operating expenses increased by 12.5% to close at J$415.36Mn due to temporary challenges. Net finance cost also rose to J$118.33Mn up for J$112.86Mn as the company increased its reliance on short-term, high-interest debt. Against this backdrop, operating profit plummeted by 55.8% to J$115.08Mn during the quarter.
  • Given the operating loss recorded in Q3 and weaker earnings performance since the start of the financial year, Tropical reported a net loss of J$146.57Mn, down 33.4%, for the nine months ended June 30, 2025, compared to J$220.16Mn profits in 2024.
  • Despite temporary challenges in the renewables segment, operational costs and high acquisition bridge loan facility interest cost, Management believes the company is poised for a robust Q4. This is underpinned by strategic investments and a precise alignment with global and regional energy transition trends. With over J$500.0Mn in renewable energy projects slated for completion in Jamaica and the Dominican Republic in Q4, the company anticipates consolidated revenues of approximately J$2.0Bn for the quarter, marking a significant rebound from Q3.
  • TROPICAL’s stock price declined by 37.9% year-to-date to $1.56 at the close of trading on

(Sources: Tropical Battery Limited & NCBCM Research)