- Delfi (SGX:P34)’s 3Q25 revenue came in at US$125mil (+6% y-o-y) and EBITDA rose to US$10mil (+16% y-o-y). The strong 3Q25 performance was attributed to the positive impact of sustained promotional spending in prior quarters to strengthen key brands and address market competition.
Top-line growth was driven by both Indonesia and Regional Markets.
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- Gross margin declined from 26.4% in 3Q24 to 25.4%, while EBITDA margin expanded from 7.5% to 8.2%. The combination of margin expansion and revenue growth delivered robust 16% y-o-y EBITDA growth in 3Q25, reversing six consecutive quarters of y-o-y decline.
- Delfi remains highly cash-generative, delivering free cash flow of US$49mil versus US$19mil in the same nine-month period last year.
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Our Views
- With 4Q typically contributing 30% to 38% of full-year EBITDA, Delfi appears on track to beat our forecasts, with 9M25 EBITDA already accounting for 75% of our estimates. The strong EBITDA performance was unexpected given the soft macro environment in Indonesia and the usual 6-to-9-month lag for cocoa price corrections to flow through to earnings. This outperformance could be reflecting the payoff from sustained investment over recent quarters and an easing of competitive pressures, which could have given the company room to trim marketing spend.
- Management also appears more upbeat on the outlook, with its latest commentary hinting at a potential turnaround in 2H26.
Increased FY25F/26F earniings by 27%/27% to reflect moderating promotionall expenses.
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