PETRA Foods Limited has decided to cease its loss-making distribution business in Singapore. Its wholly-owned subsidiary Delfi Singapore will sell its agency brands portfolio and related inventory to Auric Pacific Marketing, a subsidiary of Singapore-listed Auric Pacific Group, by June 30.
Petra Foods said that Delfi Singapore's distribution business has not been profitable for many years. "This is due to the relatively small scale which the business has been able to achieve, despite strenuous efforts to build the business to a point where it could yield positive returns for the Group," the company said in a press release on Wednesday evening.
But the company intends to continue to grow the presence of its own Delfi brand of chocolate confectionery in Singapore, by appointing Auric Pacific as distributor.
Petra Foods' CEO John Chuang added that the distribution business model remains a core part of the company's business strategy in key markets such as Indonesia, Philippines and Malaysia.
The transaction is not expected to have a material effect on the consolidated net tangible assets per share and earnings per share of the company for the current financial year.
Petra Foods' shares fell nine cents to close at S$3.46 on Wednesday, before its announcement.