Derrimon Uncovers ERP Errors, Restates Financials

Trading in the shares of Derrimon Trading Company Limited (DTL) has resumed on the Jamaica Stock Exchange (JSE) after the company submitted its outstanding audited financial statements for the year ended December 31, 2025, and its unaudited first-quarter 2026 financial results on July 10th. The suspension, which was imposed after the filings became overdue, was lifted on July 13th
Derrimon disclosed that Delayed Financials originated from its implementation of a new Enterprise Resource Planning (ERP) system, which began in 2021 after delays caused by the COVID-19 pandemic. Following a pilot rollout in late 2022, the company accelerated the migration to the new platform in 2023 after a cybersecurity incident compromised its legacy systems. Configuration and data-related issues, including errors involving unit costs and units of measure, emerged after the system was deployed across all locations in January 2024. However, these were undetected until a comprehensive inventory revaluation in late 2025 uncovered the deficiencies.
Derrimon disclosed that a comprehensive audit and 10-month remediation exercise identified and corrected the configuration issues within its ERP system that had distorted inventory costs, margins and financial reporting across its retail operations between 2023 and 2025. The company also completed a full inventory revaluation and transitioned its inventory costing methodology from average cost to First In, First Out (FIFO)¹.
Given the financial restatements, for FY2025, Derrimon reported a net loss of $2.58Bn, largely driven by a $3.77Bn inventory write-off arising from significant variances between physical inventory counts and the perpetual inventory records. Cost of sales was revised to $10.48Bn, reducing the year's gross profit margin to 3.24%.
With the corrective measures now implemented, Derrimon reported a significant recovery in its first-quarter 2026 performance. Gross profit more than doubled, increasing 120.9% year-over-year to $944.20Mn and gross margin of 31.9%, up from 9.9%. Net loss narrowed 73.0% to $169.26Mn from a restated loss of $628.09Mn in the prior-year period. At the parent company level, DTL returned to profitability, recording net earnings of $77.10Mn compared with a $611.37Mn loss a year earlier.
Management said the improved results reflect the restoration of normal gross profit margins within its Sampars and Select Grocers retail operations following the ERP corrections, as well as the early benefits of cost rationalisation, operational restructuring and strengthened governance. The company has also appointed new divisional leadership, restructured its finance function and indicated that debt reduction through improved operating cash flows and selective asset monetisation remains a key strategic priority.
On the first trading day following the end of its suspension, DTL's shares closed at J$1.28, which is 1% below the J$1.46 before suspension. At its current price, the stock traded at a price-to-book ratio of 4.27x, above the Junior Market Distribution Sector average of 3.95x.

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¹Average cost values inventory by assigning every unit the same weighted average cost, calculated by dividing the total cost of goods available for sale by the total number of units available. FIFO (First In, First Out) assumes the oldest inventory purchased is sold first, meaning the earliest costs are recognised in cost of goods sold while newer inventory remains on the balance sheet.