Delfi Q1 Ebitda down 6% year on year to US$18m, sees uptick from previous quarter

CHOCOLATE confectionery company Delfi posted earnings before interest, taxes, depreciation and amortisation (Ebitda) of US$18.0 million (S$23.9 million) for the first fiscal quarter ended March, down 6 per cent from Ebitda of US$19.1 million in the corresponding quarter last year.

The group attributed the decline to lower sales and gross margins, which were partially mitigated by lower operating expenses, mainly selling and distribution ones.

Revenue for the quarter fell 5.7 per cent to US$119.4 million from US$126.6 million in the year-ago period.

Segmentally, revenue contributions from Indonesia slipped 7.4 per cent year on year (yoy) to US$84.8 million, while revenue from regional markets fell 1 per cent to US$34.6 million.

Although categories such as baking and breakfast and food service posted y-o-y growths of 1.3 per cent and 1.9 per cent respectively on the back of stay-home consumption and other trends exhibited by consumers since last year, Delfi said this was unable to offset the decline in other categories.

On a quarter-on-quarter basis, however, Delfi's financial results showed signs of improvement. Revenue rose 14.4 per cent, while Ebitda was up 37.7 per cent as the group benefited from progress made in economies across the region after the initial impact of large-scale lockdowns due to the Covid-19 pandemic.

BT in your inbox

Start and end each day with the latest news stories and analyses delivered straight to your inbox.

Sign Up

Sign Up

Gross profit margin for the quarter fell 1.5 percentage points yoy to 29.2 per cent, but also showed a slight uptick from 28.9 per cent in Q4 last year.

Ebitda margin for the quarter, meanwhile, held fairly steady at 15 per cent compared to 15.1 per cent in the corresponding period last year.

Delfi had a net cash inflow of US$6.5 million in Q1, which increased its cash balance to US$72.1 million as at end-March.

The group said this was due mainly to a higher free cash flow of US$35.2 million as it continued its "tight cash flow management" through closely managing costs, working capital and capital spending. Delfi was also able to reduce its borrowings by US$30.4 million.

In its outlook statement, Delfi termed its Q1 results "encouraging", but acknowledged that the macroeconomic and operating environments in its markets would continue to remain challenging.

The group identified certain uncertainties and challenges in the form of the uneven or slow pace of vaccination, reinstatement of lockdowns, and the possible onset of new variants of the coronavirus.

"With these uncertainties continuing throughout this year and most likely into next year, we will continue to maintain tight control of our operating costs, working capital and capital spending. We will focus on our cash flow generation and maintain our cash holdings."

Barring any unforeseen circumstances, Delfi is cautiously optimistic that its financial performance in FY 2021 should be "better compared to FY 2020".

Shares in Delfi closed at 81.5 Singapore cents on Tuesday, up 0.6 per cent or 0.5 cent.