SINGAPORE (May 8): Delfi, the distributor of chocolate confectionery products, posted a 33.4% decline in earnings to US$5.6 million ($7.9 million) in the first quarter ended March, from US$8.4 million a year ago.
This was partially due to a higher effective tax rate on the back of higher withholding tax paid on dividend and royalty income received from the group’s subsidiaries in Indonesia.
Revenue fell 10.1% to US$93.1 million in 1Q, from US$103.6 million a year ago. This was led by a decline in its Indonesia market, which fell 14.7% to US$64.7 million.
Delfi says this was mainly due to an on-going review of trading terms, as well as an on-going product portfolio rationalisation exercise, which was implemented in 2016 to focus on core brands and products in order to drive higher margin products. Gross profit margin increased by 1.1 percentage point to 33.0% in 1Q17.
In addition, revenue from Indonesia fell due to higher-than-usual deliveries to trade customers in 2016.
Cash and cash equivalents stood at US$54.9 million as at March 31, 2017.
Looking ahead, Delfi says consumer spending is likely to be affected by economic and currency volatility in its core markets.
“We are extending our reach in all our key markets by having better channel segmentation to widen our distribution coverage,” says Delfi CEO John Chuang.
“To add further value over the longer term to its quality earnings, Delfi is seeking suitable opportunities to enter new markets and extend into new categories,” he adds.
Shares of Delfi last closed at $2.20 on Friday.
