Delfi Q1 earnings up 13.9% on higher sales

CHOCOLATE confectionary company Delfi : P34 0% posted an earnings before interest, taxes, depreciation and amortisation (Ebita) of US$20.5 million in Q1, up 13.9 per cent from the corresponding period last year.

Delfi said in a business update late on Wednesday (May 18) that the growth came from higher sales and continued tight control of operating costs for the period.

“The growth achieved reflects the company’s focus on growing core strategic products to capture the momentum from higher consumer demand, supported by improved sentiment in the markets as economies opened up,” the mainboard-listed company added.

Revenue was up 11.4 per cent year on year to US$133 million, on growth from both the Indonesian and regional markets segments. Revenue for the Indonesian segment rose 9.5 per cent to US$92.8 million; that for the regional markets improved by 16.1 per cent to US$40.2 million.

The group generated a free cash flow of US$24.9 million for the quarter ended Mar 31, which it attributed to “higher profitability and a positive moment in working capital”. The latter was achieved by a reduction in inventory of US$6.4 million and an increase in trade payables of US$3.7 million.

Delfi expects an improved operating environment for the remainder of the year, as economies continue to open up, improving consumer sentiment in the markets in which it operates.

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Even so, it foresees that ongoing political uncertainties, economic volatility and supply-chain bottlenecks will lead to continued raw-material inflation in the coming year.

“However, with our strong balance sheet and commercial strategies in place, we can — provided these uncertainties and challenges are managed, and barring unforeseen circumstances — be cautiously optimistic for a better performance in 2022,” said the group.

The counter closed S$0.005 or 0.7 per cent higher at S$0.745 on Wednesday before the announcement.