Today, Delfi Limited has announced their 3Q2021 financial results. Earlier this year in March, I did an analysis on Delfi Limited (SGX: P34). Back then, I entered into a small position with Delfi Limited.
Recently, the share price of Delfi Limited fell which I think is an opportunity to increase my position. Let us look at Delfi Limited 3Q 2021 financial results to see how this company fared.
Delfi Limited 3Q2021 Financial Results
In 3Q2021, Revenue was higher by 4.1% Y-o-Y from improvements seen in both Indonesia and the Regional Markets.
Gross Profit Margin (“GPM”) in 3Q 2021 improved to 27.0% from 24.2% as compared to a year ago arising from higher sales and an increase in the proportion of premium format category vis-à-vis value products in our sales mix; and lower inventory write-offs.
| 3Q2021 (US$’mil) |
3Q2020 (US$’mil) |
Change | |
| Revenue | 87.0 | 83.6 | 4.1% |
| – Indonesia | 53.1 | 51.7 | 2.7% |
| – Regional markets | 33.9 | 31.9 | 6.4% |
| Gross Profit Margin | 27.0% | 24.2% | 2.8% |
| EBITDA | 6.4 | 5.3 | 20.8% |
For 9 months ended 30th September 2021, Delfi Limited achieved a revenue of US$297.5 million and EBITDA of US$32.9 million, representing a growth of 6.0% and 6.6%, Y-o-Y, respectively.
| 9M2021 (US$’mil) |
9M2020 (US$’mil) |
Change | |
| Revenue | 297.5 | 280.7 | 6.0% |
| – Indonesia | 197.1 | 185.0 | 6.6% |
| – Regional markets | 100.4 | 95.7 | 4.9% |
| Gross Profit Margin | 28.4% | 28.4% | – |
| EBITDA | 32.9 | 30.8 | 6.6% |
With higher profit achieved and our tight management their working capital, Delfi Limited’s Free Cash Flow (“FCF”) generated for 9M 2021 was higher at US$67.7 million, an increase of US$38.0 million, from the same period a year ago.
Delfi Limited used the free cash flow to significantly reduce their borrowings by US$39.8 million. After the reduction of borrowings, there was still a resulting net cash inflow of US$13.5 million in the period.
Summary of 3Q2021 Financial Results
In my opinion, Delfi Limited has performed well given the current COVID-19 pandemic. I like Delfi Limited for its strong free cash flow.
Delfi Limited’s own brands in Indonesia has gain traction as it posted a growth of 6.5% Y-o-Y driven by their chocolate confectionery, and biscuits and wafers categories.
Nevertheless, there are risks that are unforeseen. New waves of COVID-19 infections may be encountered or a higher level of economic activity alongside global supply chain kinks may trigger higher input costs, leading to higher cost inflation in the coming year.