By Ted P. Torres (The Philippine Star) Updated July 27, 2011 12:00 AM
MANILA, Philippines - Chemrez Technologies Inc. has registered a 25 percent growth in net earnings in the first semester of 2011 to P329 million, from P263 million in the first half of 2010, due to the lower cost of goods sold and a higher oleochemical (including biodiesel) sales despite stiff competition.
The firm also said its net profit margin increased from 8.8 percent in 2010 to 11.4 percent in 2011.
Consolidated sales, however, slipped to P2.9 billion, four percent lower than the P3 billion recorded in the same period in 2010, due to the tight competition in the biodiesel market.
Revenue mix was steady at 60 percent oleochemicals, 35 percent resins and five percent powder coating. Chemrez said it has been able to maintain a leading market share in the industries it is in.
Cost of goods sold as a percentage of sales was six percent lower than the same period in 2010, due to lower overhead and raw materials costs.
Lower cost of sales resulted in gross profit margin, which was 10 percent higher at P439 million in the first half of 2011 than the P400 million in the same period in 2010.
Selling and marketing expenses fell 18 percent from P47.7 million in the first half of 2010 to P39.2 million this year. Major reasons for the decline were lower delivery expenses due to lower sales and lower bad debts due to improvement in collection.
Administrative expenses increased 16 percent from P42.5 million in 2010 to P49.1 million this 2011 on "higher taxes and licenses as a result of higher 2010 sales versus 2009 sales, and higher salaries which is a result of the acquisition of the dispersion business in mid of 2010," it said in a statement.
Other income increased almost 19 times from P697,000 in 2010 to P13 million this 2011. That was due to the strengthening of the peso against the dollar as the firm benefited from its importations.
Interest expense increased from almost zero in 2010 to P5.5 million in 2011.
Chemrez is the country's pioneer in oleochemicals, biodiesel and resin manufacture. It produces 450 tons of refined glycerine every month, about two-thirds of which is exported to China and India.