TROPICAL Battery Company Limited’s recent expansion into the Dominican Republic’s market has yielded record-breaking results, with a gross operating revenue of $782.8 million over the past nine months. This figure represents an 18.3 per cent increase from the same period last year, as highlighted in its third quarter (Q3) results.

According to the company, the increase was driven by the 51 per cent acquisition of Kaya Energy Group.

“This strategic move has not only expanded our market reach but also diversified our product portfolio. It has allowed us to deepen our understanding of diverse market needs, informing our approach to both product development and customer engagement,” said Managing Director Alexander Melville in a written response to the Jamaica Observer.

The company’s revenue growth over the nine months stood at 8.9 per cent, surging from $1.95 billion in 2022 to $2.13 billion in 2023. Despite facing challenges, gross profit for Q3 2023 reached $228.7 million, surpassing the previous year’s figure by $21 million. The gross profit margin of 30.0 per cent is slightly below its financial year 2022, reflecting the impact of expansion efforts.

“Adapting to the Dominican market presented unique challenges, including navigating different regulatory environments and understanding local consumer preferences. However, these challenges were met with robust strategies and execution by our experienced team, leading to new opportunities for growth and learning,” Melville told the Caribbean Business Report while remaining on a positive note.

Buoyed by its success in the Dominican Republic, Tropical Battery is exploring further expansion within the region. According to Melville, its strategy is to replicate its successful model, leveraging its insights and experiences to gain a foothold in other Caribbean markets. The incorporation of Tropical Battery USA, LLC signifies another major growth opportunity for the company.

“This expansion is part of our broader strategy to leverage our strong foundation and enter new, high-potential markets,” Meville expressed as a way to target the vast and diverse North American markets of the United States.

Tropical Battery is aiming to increase sales, enhance brand awareness, and leverage online distribution through partnerships with leading platforms like Amazon. Tropical’s third quarter results also pointed to a strategic focus on energy efficiency, renewable energy, and electric mobility, and Meville emphasised that as the global energy landscape evolves, that’s where the company’s focus will remain.

“We see these global shifts not just as challenges but as opportunities to expand and diversify our offerings. Our strategy is shaped around these dynamics, positioning us to capitalise on emerging trends and market demands,” he said.

Net profit for Q3 2023 amounted to $38.8 million, with the company attributing the decrease to one-time costs and expenses. Tropical has advised that improving its cash conversion cycle and enhancing return on capital employed (ROCE) are critical aspects of its strategic approach.

“We are focused on optimising our operations and financial management to improve liquidity and drive profitability,” said Melville. “Our experienced team plays a pivotal role in this aspect as well. Their expertise in financial management and operational efficiency is key to executing this strategy effectively.”