Confectionery maker’s performance dips on the back of lower sales and currency weakness
CHOCOLATE and confectionery manufacturer Delfi posted a 22.3 per cent drop in its net profit for the first half of the year ended Jun 30, to US$19.6 million, from US$25.2 million in the year-ago period.
Revenue slid 7.8 per cent to US$260.8 million from US$283 million.
In a bourse filing on Tuesday (Aug 13) the company attributed the performance to weakened regional currencies and reduced sales as a result of lower spending on trade promotion.
It noted that on a constant-currency basis, revenue and net profit would have been lower by 3.3 per cent and 17.4 per cent, respectively.
Purchases of raw materials were hit by the rupiah weakening against the US dollar, reducing gross profit margin by 0.4 basis points to 28.8 per cent.
Delfi said it made a strategic decision to reduce promotional spending on its own brands, so sales took a dip as a result. It also terminated one of its agency brands, reducing sales in that segment by 2.1 per cent.
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Own-brand sales revenue dipped to US$148 million from US$167.8 million; agency-brand sales revenue slid to US$112.8 million from US$115.2 million.
Geographically, Indonesia revenue declined 10.7 per cent to US$169.7 million. In the regional markets, revenue dipped by 1.9 per cent to US$91.1 million.
On a per-share basis, its earnings were 3.2 US cents, down from 4.12 cents in the previous corresponding period.
Delfi declared an interim dividend of 2.06 US cents per share, to be paid out on Sep 12.
It said it would continue investing in building brands for products that promise future growth, and strengthen its routes to market to support the long-term growth of the business.
Shares of Delfi closed flat at S$0.845 on Monday before the announcement.
