COCONUT products manufacturer Axelum Resources Corp. (Axelum)reported doubling its net income in 2019, driven by improved gross margins despite lower revenues.
The listed firm said in a statement yesterday its net income last year jumped 113% to P775.60 million, despite a 10% drop in revenues to P5.30 billion.
The sales decrease was attributed to a global decline in vegetable oil prices, which reduced the company’s average selling rates. But its bottomline was cushioned from its impact due to an improved gross margin of 29% from 23%.
“[The improved gross margin is] a result of on-going efforts intended to leverage on operational efficiencies, streamline processes and optimize production costs,” Axelum said.
Operating expenses clocked in at P297 million, with net income margin rising to 15% from 6% in 2018.
“The year 2019 was a transformational period for Axelum as it transitioned from a private homegrown company into a publicly-listed entity,” Axelum President and Chief Operating Officer Henry J. Raperoga said in the statement.
“We also achieved a record level in terms of profitability despite encountering various headwinds brought about by an overall challenging environment. We were faced with global price volatilities of vegetable-based oil, rising input costs and a stronger peso currency, amongst others. Looking ahead, we are determined to sustain this growth trajectory in 2020,” he added.
Axelum is allocating P600 million for capital expenditures this year, which it will use to expand its distribution channels both locally and overseas, upgrade its production equipment and come up with new products. It is also in preliminary discussions for potential acquisitions.
“From our end, this represents a unique opportunity to further enhance our value-chain, extend our product line, future-proof manufacturing capacity, increase market share and derive additional operating synergies across the business. Hopefully, we can close a good deal within the year,’’ Mr. Raperoga said. — Denise A. Valdez