Delfi Limited

Delfi Operational Update 3Q2022

Delfi Limited

On 15th November 2022, Delfi has provided a brief operational update for 3Q2022. Delfi currently makes up 3.65% of my stock portfolio. If you want to know why I bought Delfi, you can read up my analysis of Delfi.

Over the years, Delfi had been growing their sales and there was strong demand for their products, especially in the premium format category.

How has Delfi performed in 3Q2022? Let us find out more below.

Delfi 3Q2022 Financial Information

Revenue for 3Q2022 was 28.7% higher year on year at US$112.0 million. As you can see from the table below, the growth achieved in 3Q 2022 reflects very strong Y-o-Y growth in revenue for both Indonesia at 31.9%, and Regional Markets at 23.9%, with revenue figures of US$70.0 million and US$42.0 million, respectively.

Revenue 112.0 87.0 28.7%
– Indonesia 70.0 53.1 31.9%
– Regional markets 42.0  33.9 23.9%
Gross Profit Margin 29.7% 27.0% 270 bps
EBITDA 13.7 6.4 116.0%

Higher sales growth, combined with disciplined cost control, improved operational efficiencies, while tighter control of costs helped drive Delfi’s Gross Profit Margin (“GPM”) higher for 3Q 2022 by 270 basis points to 29.7%.

Delfi also doubled their overall EBITDA to US$13.7 million, on the back of
(i) higher Y-o-Y sales of US$25.0 million, (ii) higher GPM achieved, and (iii) continued tight control of their operating costs.

For the nine months ended 30 September 2022, Delfi had generated a Free Cash Flow (“FCF”) of US$14.0 million on higher profitability combined with continued tight management of working capital.

Current Dividend Yield

Based on the current share price of S$0.77 and FY21 Distribution Per Unit (DPU) of US$2.83 cents (~ 3.2 Singapore cents), this translate to a current dividend yield of 4.2%.

Delfi Share Price 18 Nov 2022

Summary of Delfi Operational Update 3Q2022

Delfi expects the positive growth momentum to continue for the rest of the year.

However, we need to watch out for heightened geopolitical tensions, currency volatility, supply chain bottlenecks and inflationary pressures in Indonesia and elsewhere which are expected to add to the rising cost of materials and overall prices later in 2022.

The share price of Delfi has previously fallen to a low of S$0.69 whereby the estimated dividend yield works out to be 4.63%. It seems that investors have strong confidence in Delfi and share price bounced back to current S$0.77.

Should the share price fall below S$0.70 again, I shall continue my accumulation of Delfi.

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