Delfi has reported lower earnings for the 1QFY2024 ended Mar 31, 2024 of US$23.3 million ($31.40 million), a 8.5% y-o-y decline on the back of consolidated net sales.
The group’s net sales saw a 5.3% y-o-y decline to US$150.7 million due to the decision to reduce and refocus on spending on trade promotions, combined with weakness in regional currencies against the US dollar.
This was driven by lower y-o-y sales in Indonesia and regional markets by 6.6% and 2.5% respectively.
In Indonesia, the lower sales performance can be attributed to lower own brands sales following the strategic decision to adopt lower but more targeted trade promotions. The performance in own brands was partially offset by more robust performance in agency brands which improved by 4.1%.
Delfi’s gross profit margin for the quarter stood at 30.2%, an increase of 50 basis points (bps) compared to the same period a year before. This is due to the decision to reduce spending on trade promotions.
Delfi’s cash and cash equivalents came in higher y-o-y for the quarter, at US$66.7 million from US$59.4 million in the same period a year before.
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The group’s net cash from operations (after working capital) stood at US$35.0 million for the quarter, and was utilised to fund capital expenditures of US$11.9 million.
The group says that looking ahead, it remains unclear how heightened geopolitical tensions, macroeconomic challenges, high interest rates, supply chain disruptions and rising commodity prices may impact consumer confidence in their key markets in 2024.
However, the group will remain focused on growing its core brands and further driving growth in their premium and value format categories, as well as by implementing initiatives to mitigate higher input costs.
Shares in Delfi closed flat at 88.5 cents on May 28.
