Chemrez revenues surge 27% to P3 billion in first half

MANILA, Philippines - Chemrez Technologies Inc., the country’s top biodiesel, resins and oleochemicals producer, said a huge improvement in its exports drove their revenues up 27 percent in the first semester of the year to P3 billion, from P2.4 billion in the same period in 2009.

The company said improved economic activities during the period also boosted its consolidated sales.

The green technology producer said sales volume was up compared to the same period last year, a sign that the economy is starting to recover from the global financial crisis.

Half of the revenue increase was attributed to higher exports, which grew 15 percent, driven by the high demand for amides and esters used in the detergent, soap and cosmetic sectors in overseas markets. 

On the other hand, the firm’s various resin products registered mixed volume results. Its revenue mix consists of 57 percent oleochemicals, with biodiesel remaining the main revenue driver; 39 percent resins; and four percent powder coating.

ChemrezTech said it has been able to maintain a leading market share in these industries.

Based on unaudited financial results, cost of goods sold as a percentage of sales for the first half of 2010 inched up four percent on higher raw materials costs. 

Higher cost of sales resulted in lower gross profit margin – 13 percent versus 17 percent; selling and marketing expenses increased 12 percent from P42.4 million in 2009 to P47.7 million this year due mostly to the significant increase in delivery expenses which, in turn, resulted from the increase in sales volume; administrative expenses also increased 12 percent from P37.9 million in 2009 to P42.5 million in 2010, also directly attributed to the increase in sales; and tax expense increased as a result of the growing sales from segments which do not enjoy tax incentives.

Because of the significantly higher raw material costs and higher tax expense, unaudited net profit decreased 15 percent to P262.9 million in the first half of 2010 from the P308.5 million registered in the same period in 2009.

As a result, net profit margin decreased to nine percent from 13 percent; while earnings per share for the period decreased to P0.20 from P0.23 for the same period in 2009.

This notwithstanding, ChemrezTech is optimistic it will continue to dominate the industries it operates in. 

ChemrezTech said the company maintains a strong position in the supply of resins for coatings, plastics, and construction while its powder coating business is looking to increase further its market share by introducing new products and increasing promotions on unique product lines.

Coco-biodiesel and other oleochemical specialties will continue to be the largest operating business of ChemrezTech in 2010, contributing to the majority of the company’s revenues.