Latest Financials
Condensed Interim Financial Statements For the six months ended 30 June 2024
Financials Archive
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Condensed Interim Consolidated Income Statement
Note:
(1) Diluted earnings per share for the 6 months ended 30 June 2024 and 2023 are the same as basic earnings per share
as there were no potentially dilutive ordinary shares.
NM - Not meaningful.
Condensed Interim Consolidated Statement Of Comprehensive Income
Condensed Interim Balance Sheets
Review of Performance
Review of the Group’s 1H 2024 Financial Performance
The Group recorded 1H 2024 revenue and PATMI of US$260.8 million and US$19.6 million respectively, lower Y-o-Y by 7.8% and 22.3% respectively in the Group’s USD reporting currency. In constant currency terms, our revenue and PATMI would have instead been lower by 3.3% and 17.4% respectively. The following key factors contributed to our performance:
- Weakness in regional currencies, with the Rupiah weakening by 4.9% against the US Dollar. This impacted our raw material purchases resulting in a 0.4% basis points (“bps”) decrease in our 1H 2024 Gross Profit margin;
- Lower Own Brands sales on reduced promotion spending as part of our strategy to optimize our promotional spending; and
- Our Agency Brands sales in 1H 2024 were lower by 2.1% Y-o-Y reflecting the
termination of an Agency Brand in the 3rd quarter of 2023. However, on a comparable
basis (i.e. excluding the terminated Agency), our Agency Brands increased by 8.6%
Y-o-Y.
In 1H 2024, we continued to tightly manage our working capital requirements (particularly our inventories and trade receivables). As a result of the tight working capital management, we generated net cash from operations of US$37.6 million (higher Y-o-Y by US$14.1 million). The Group’s cash position as at 30 June 2024 stood at US$54.8 million, after the dividend payment of US$13.8 million and capital expenditure (mainly for our capacity expansion programme) of US$25.7 million during the first six months of the year.
Performance Review by Markets
Indonesia
Our business in Indonesia during 1H 2024 generated revenue of US$169.7 million (Y-o-Y decrease of 10.7%). The decrease was mainly due to a 12.1% drop in Own Brands and a 7.1% Y-o-Y decline in Agency Brands. The decrease in Agency Brands revenue was attributed to the termination of an Agency Brand, and excluding this, Agency Brands would have experienced an 18.5% Y-o-Y growth.
The Regional Markets
For our Regional Markets, revenues during 1H 2024 decreased by 1.9% to US$91.1 million. The decline was attributed to lower demand for Own Brands, although it was partially offset by Agency Brands growth particularly in the Philippines and Malaysia.
Review of 1H 2024 Profitability
Our overall Gross Profit Margin (“GPM”) of 28.8% for 1H 2024 was lower Y-o-Y by 0.4% point, attributed to the impact of weakness in the regional currencies, especially the Indonesian Rupiah against the USD. This impacted our raw material costs.
The Group generated an EBITDA of US$32.8 million for the period, (decrease of 17.8% Y-o-Y), reflecting the lower net sales, lower GPM. For 1H 2024, our EBITDA margin was 12.6%. During the period, we continued to invest in initiatives to build the brand for the products that we expect to show stronger future growth, and in strengthening our routes-to-market. These investments are strategically important to support the long-term growth of our business.
Review of Financial Position and Cash Flow
During the period, we continued to tightly manage our working capital requirements. As a result of the tight working capital management, the Group generated net cash from operations of US$37.6 million, higher Y-o-Y by US$14.1 million. Our working capital requirements for 1H 2024 amounted to US$134.0 million, a decrease of US$25.7 million compared to the end-2023 figure with the improvement arising from the reduction of inventories and trade receivables by US$21.7 million and US$10.6 million respectively. Given the continued inflation and ongoing supply chain challenges across the region, we will closely monitor our inventory holdings to ensure we continue to have access to a steady supply of raw materials, ingredients, and other inputs for our products. Moreover, we will continue to maintain strict control over our working capital.
Of the cash generated, US$25.7 million was utilised for our capital expenditure, mainly for our capacity expansion programme in anticipation of continued market growth and advances for purchase of property, plant and equipment. This capital expenditure programme will be constantly monitored and evaluated against any changes in market conditions with investments possibly deferred to a later period, if required.
As at 30 June 2024, the Group’s cash and bank deposits were US$54.8 million after dividend payments of US$13.8 million in May of this year and the US$25.7 million of capital expenditure. We remain confident that our strong balance sheet gives us a resiliency in the face of any uncertainties that might emerge going forward.
Compared to 31 December 2023, total assets as at 30 June 2024 were lower by US$18.1 million reflecting mainly: (i) a lower cash balance; (ii) a decrease in inventories; partially offset by, (iii) an increase in property, plant and equipment. Shareholders’ equity was also lower by US$7.2 million due to a higher foreign currency translation loss and a dividend payment of US$13.8 million, partially offset by the profit for the period.
Commentary
The year so far has seen increasing global uncertainties from heightened geopolitical tensions and escalating macroeconomic challenges with the situation is exacerbated by the elevated levels of commodity prices (especially cocoa prices) and currency volatility. Notwithstanding the economic growth in our markets, the high inflationary environment could potentially dampen consumer confidence, which could possibly moderate our profit growth.
However, we remain positive that we can mitigate many of these potential risks by:
- Remaining focused on investing in our core brands to further drive growth in our Premium and Value format categories;
- Continuing to implement initiatives to launch of new products in our Premium format category; and, initiatives to contain costs;
- Strengthening collaboration with our retail partners to enhance consumer engagement and further drive demand and by continuing to focus on expanding coverage of the rapidly growing Modern Trade Independents channel;
- Continuing to strengthen distribution and manufacturing capabilities, and to focus on improving productivity and efficiency targets; and
- Continuing to tightly manage our operating costs, collections and working capital levels. Although we expect to have higher working capital requirements to support future business growth, we will remain vigilant in tightly managing receivables, inventories, and payables at appropriate levels.