Delfi Limited 3Q2021 Financial Results

Delfi Limited

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.

Frasers Logistics and Commercial Trust FY21 Full Year Results

Frasers Logistics and Commercial Trust FY21 Portfolio

Frasers Logistics and Commercial Trust has announced their FY21 full year results on 11th November 2021. The financial results are simply solid!

The REIT has achieved a year-on-year growth in DPU of 7.9%. Net Asset Value (“NAV”) also increased 12.7% from S$1.10 to S$1.24.

Frasers Logistics and Commercial Trust FY21 Full Year Results

In 2H2021, gross revenue and adjusted net property income was higher due to the acquisitions undertaken in FY2020 and the 2021.

A Distribution Per Unit (“DPU”) of 3.88 Singapore cents was declared in 2H2021 which is 6.3% higher than 2H2020.

2H2021
(S$’000)
2H2020
(S$’000)
Change
Gross Revenue 237,627 213,284 11.4%
Net Property Income 181,271 161,355 12.3%
Distributable Income 139,649 124,863 11.8%
Distribution Per Unit (“DPU”) (Singapore cents) 3.88 3.65 6.3%

The DPU for the full year FY2021 stood at 7.68 Singapore cents which is 7.9% higher than FY2020.

FY2021
(S$’000)
FY2020
(S$’000)
Change
Gross Revenue 469,328 332,029 41.4%
Net Property Income 355,161 258,335 37.5%
Distributable Income 270,075 201,080 34.3%
Distribution Per Unit (“DPU”) (Singapore cents) 7.68 7.12 7.9%

Debt

Gearing ratio stood at 33.7%. Average weighted debt maturity improved by 0.3 years to 3.4 years, with the 7-year notes issuance in July 2021 and new financings entered into in FY2021.

Frasers Logistics and Commercial Trust has a credit rating (S&P) of BBB+ / Stable.

Frasers Logistics and Commercial Trust Debt Maturity Profile 30 Sep 21

Occupancy

Overall portfolio occupancy stood at 96.2%. The occupancy for the Logistics & Industrial Portfolio and Commercial Portfolio stood healthy at 100% and 91.5% respectively.

Frasers Logistics and Commercial Trust Occupancy 30 Sep 21

Current Dividend Yield

As you can see below, Frasers Logistics and Commercial Trust has been paying dividends consistently year-on-year. In fact, DPU increased year-on-year.

Based on the current share price of S$1.51 and FY2021 full year payout of 7.68 Singapore cents, this translate to a current dividend yield of 5.09%.

Frasers Logistics and Commercial Trust DPU History

Summary of Frasers Logistics and Commercial Trust FY21 Full Year Results

In my opinion, this is one solid REIT to invest in for the following reasons.

  • Healthy occupancy.
  • Low gearing ratio of 33.7% which means there is room for more debt for further acquisitions.
  • DPU increase year-on-year.

Having said that, here are some considerations.

  • Low current dividend yield at 5.09%. Patient investors can wait for the share price to come down so that current dividend yield will go up.