We remain upbeat on Delfi (SGX:P34), as cocoa prices are easing – which should strengthen margins. Despite lowering our projections, its FY25-27F earnings CAGR remains sturdy, at 16%.
9M25 revenue and core operating profit were lower than estimated.
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The slight revenue growth in 9M25 was driven by stronger sales in regional markets (US$148m, +7.2% y-o-y), offset by a slight decline in Indonesia (US$236m, -1.7% y-o-y), which was dragged by a dip in agency brand sales due to reduced promotional support from certain agency partners in 1H25. However, the strong 3Q25 performance by its key brands in Indonesia helped to mitigate the overall sales decline to just -1.7% y-o-y. Strong regional market sales were led by Malaysia, and the Philippines particularly in 3Q25.
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Previously, Delfi announced poorer-than-expected 1H25 earnings of US$13m (-34% y-o-y) on a sales decline of 0.5% y-o-y to US$260m. It also declared an interim Delfi's dividends of 1 US cent in 1H25, which amounted to a dividend payout ratio of ~50%.
Expect better margins from easing cocoa prices.
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