- Delfi (SGX:P34) reported a strong set of 1H22 results, surpassing its pre-COVID performance in 2019. Net profit surged by 57.6% y-o-y to US$19.4m on the back of a 17% revenue growth to US$246.3m. The growth in revenue was driven by both its Indonesia and regional markets, on the back of easing COVID-19 restrictions and improving consumer sentiment.
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- Delfi’s Indonesia operations performed well, achieving revenue of US$167.2m (+16.1% y-o-y), accounting for 68% of total revenue, similar to 1H21. Growth was seen in its own brands across its product categories, especially in its premium brands such as SilverQueen and Cha Cha. Its agency business grew by a smaller 7.2%, helped by its snack and consumer categories. Indonesia EBITDA grew by 30.4% y-o-y to US$32.2m, with margins improving to 19.2% in 1H22, from 17.1% a year ago.
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- Along with its positive operating performance as well as its control of costs, cash flow, and capital spending, Delfi’s cash increased further to US$94.6m, up from US$86.2m as of 31 Dec 2021. This implies that Delfi’s net cash as of 30 Jun 2022 accounts for about 25% of its current market capitalisation. We believe there lies an opportunity for the board/management to deploy the cash and/or to return it to shareholders to enhance value for the counter.
- An interim dividend of 2.18 cents was declared, making it the highest interim dividend since Delfi’s divestment of its cocoa business in 2014. See Delfi's dividend history. The dividend equates to a payout ratio of 50%.
Delfi - Valuations and forecasts
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