My Sweet Retirement

The basic healthcare sum (BHS) will increased from S$63,000 in 2021 to S$66,000 in 2022. This means that I have to prepare S$3,000 in cash to top up my MediSave Account (MA) in January 2022.

What is the Basic Healthcare Sum?

The Basic Healthcare Sum (BHS) is the estimated savings you need in your MediSave Account for your basic subsidised healthcare needs in old age.

If you are below the age of 65

The Basic Healthcare Sum (BHS) will be adjusted annually to keep pace with the expected growth in MediSave use by the elderly.

If you turn 65 in 2022

If you are turning 65 years old in 2022, the Basic Healthcare Sum (BHS) will be fixed for the rest of your live at 66K.

Benefits of Maxing Out your MediSave Account

With the increase in limit for the basic healthcare sum (BHS), we can take the opportunity to top up our MediSave Account (MA) using cash.

You might ask why do we even bother to top up our MediSave Account using cash?

There are several benefits of hitting the limit (S$66,000) of your Medisave Account:

Tax rebates if you use cash to top up your MediSave Account (MA).
If you have hit the max of your MediSave Account (MA) at S$66,000, your monthly CPF contribution from your salary and employer gets overflown over to your Special Account (SA). The Special Account (SA) earns you a higher interest of 4% per annum. If you are worried that the government will lower the interest rates, fear not. The 4% floor rate for interest earned on all Special, MediSave and Retirement savings will be extended until 31 December 2022. If your Special account (SA) have met the Full Retirement Sum (FRS), the monies will overflow to your Ordinary Account (OA) which earns you a 2.5% interest rate per annum.

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.