SINGAPORE (Aug 13): Chocolate confectionary company Delfi announced that its 2Q19 earnings have increased by 19.4% to US$6.1 million ($8.5 million), compared to US$5.1 million in 2Q18.

This brings earnings for the 1H19 ended June to US$15.4 million, 20.7% higher than US$12.7 million in 1H18.

2Q19 revenue increased by 3.0% to US$112.3 million from US$109.1 million a year ago, mainly due to a 13.4% y-o-y increase in sales from the group’s agency brands to US$41.6 million.

The increase in revenue was partially offset by a 2.3% y-o-y drop in sales from the group’s own brands to US$70.8 million.

The group says this reflects its strategic initiative to phase out unprofitable value products and focus on building higher-priced products in the General Trade segment in Indonesia.

With cost of sales increasing marginally by 0.2% y-o-y to US$71.6 million, gross profit for 2Q19 came in at US$40.7 million, 8.2% higher than US$37.6 million in the previous year.

Selling and distribution costs increased by 10.7% y-o-y to US$23.0 million, while finance costs grew 27.7% y-o-y to US$1.0 million.

Share of loss of associated company and joint ventures widened by 64.7% to US$285,000 from US$173,000.

The group’s cash and cash equivalents at the end of the period came in at US$40.5 million.

Delfi’s board has declared an interim dividend of 1.73 cents per share, some 17.7% higher than last year’s interim dividend of 1.47 cents.

John Chuang, CEO of Delfi says: “Looking ahead, we expect the operating environment to become more challenging. Through our continued focus on top line expansion by further growing our core premium brands, extending into the snacking category and strengthening our value segment in the General Trade channel; together with stepped up productivity efforts and the growth momentum achieved to-date, we are cautiously optimistic about the growth prospects for the full year, barring unforeseen circumstances.”

Shares in Delfi closed 2 cents lower, or down 1.6%, at $1.24 on Tuesday before the results announcement.