Chemrez profit down 38% in first 9 months

Chemrez Technologies Inc.—the country’s leading biodiesel, resins and oleochemicals producer—posted a 38-percent decline in net profit in the first nine months to P224 million from P364 million a year ago.

In a filing with the Philippine Stock Exchange yesterday, Chemrez reported that total sales fell by 28 percent to P2.9 billion in the nine months to September from P4 billion in the same period last year, due mainly to the drop in the sales of oleochemical and resins.

Oleochemicals accounted for 41 percent of the company’s total sales (both domestic and export); resins, 50 percent and powder coating, 9 percent.

Oleochemical sales, including biodiesel, plunged by 48 percent to P1.2 billion in the first nine months from P2.3 billion in the previous year due to tight competition in the biodiesel market. Resin sales similarly dipped by 7 percent to P1.4 billion from year-ago level of P1.4 billion.

Sales of powder coating, meanwhile, rose by 14.5 percent to P252 million in the same period from P220 million a year ago. This, however, was due to increases in the price of the product.

Chemrez also reported that export sales during the first three quarter fell by 29 percent to P542 million from P763 million a year ago.

According to Chemrez, its selling and marketing expenses amounted to P52 million during the same period, 9 percent lower than the P57 million posted  in 2011. The company attributed the decline to the P4-million drop in delivery expenses to P26 million, lower sales and the P2-million cut in advertising and promotions expense.

Administrative expenses rose by 2 percent to P72 million due to the P3-million hike in taxes and license fees, and in the amount of donations made by the company.

Starting this year, Chemrez said it would be donating 1 percent of the prior year’s net income, which is equivalent to P3.1 million for this year, to the Lao Foundation to provide educational assistance to the underprivileged.

Earnings per share for the period dropped to 17 centavos in 2012 from 28 centavos in 2011. Amy R. Remo