Am I entitled to claim compensation for the delay in receiving the principal and profits after the merchant initially specified a profit amount then retracted it, bearing in mind that the installments received were small and not investable?

If a person gives money to another to trade with, on the condition that the profit be shared between them, this is a Mudarabah (commenda) contract.

The condition that the trader guarantees the deal, as well as specifying a fixed time for the Mudarabah to end, are voided. The Mudarabah remains valid, and only the invalid condition is nullified.

An agreement to divide the capital of the Mudarabah before it has been liquidated is valid, whether it is a division in kind or by value, provided that the capital's value at the time of division is considered, without increase or decrease.

It is not permissible for the agent (worker) to refuse to pay the investor's share. The agreed-upon money remains a debt owed by him. Procrastination is forbidden if he is solvent. However, if he is in financial difficulty, then "And if there is one in [financial] difficulty, then [let there be] postponement until [a time of] ease." [Quran 2:280]. Forgiveness is recommended: "But to give in charity is better for you, if you only knew." [Quran 2:280].