SINGAPORE (Feb 26): Delfi, the chocolate confectionery company, achieved FY17 earnings of US$22.1 million ($29.1 million) on the back of US$380.9 million in sales.
This is a 5.3% and 15.5% y-o-y decline in sales revenue and earnings respectively compared to a year ago.
Delfi says the group’s FY17 performance reflected the product rationalisation programme as part of the strategic initiatives to re-orient the group’s business in Indonesia for future growth.
The strategic initiatives implemented included a strengthening of its management team and organisation; a review and trimming of its portfolio of products, eliminating underperforming and low-contributing products; and a revision of its routes-to-market strategy.
Own Brands sales continued to be the major contributor to the group’s business in FY17, forming more than 60% of its revenue. However, compared to FY16, revenue from Own Brands fell 7.1% to US$236.9 million in FY17 due to the group’s on-going product rationaliation exercise and a Government imposed transport disruption in Indonesia in Dec 2017.
Meanwhile, weaker overall Agency Brands sales in FY17 led to the discontinuation of two agency brands in the Philippines and higher trade discounts implemented in Indonesia. This was partially offset by stronger performance in Malaysia, which was driven by higher sales in confectionery and healthcare products, while the remaining agency brands in Philippines achieved double digit growth.
On a quarterly basis, earnings grew 6.1% y-o-y to US$3.9 million despite a 5.6% y-o-y decline in sales to US$99.7 million.
As a result of its cost-containment initiatives and better sales of high-margined products, Delfi’s gross profit margin (GPM) has been on an uptrend q-o-q in FY17 with 4Q17’s GPM at 35.6%, and the full year’s GPM at 34.1%. EBITDA margin fell 0.2 ppt y-o-y to 11.7% and 0.8 ppt y-o-y to 11.8% in 4Q17 and FY17 respectively.
Delfi has proposed a final dividend of 0.76 cents per share, which together with the interim dividend of 1.66 cents per share, brings the total dividend for the year to 2.42 cents per share.
With its product rationalisation exercise largely completed and other strategic initiatives expected to be fully implemented by 2018, Delfi says it is optimistic that it is well-positioned for future growth.
Shares in Delfi closed at $1.52 on Monday.
