AXELUM Resources Corp. posted a 32% increase in net income in the third quarter, despite lower revenues as it shifted to production of high-margin products.
In a regulatory filing on Monday, the listed coconut products manufacturer said it booked a net income of P205.482 million in the three-month period ending September, compared to P155.145 million in the same period last year.
Sales slumped 14% to P1.3 billion in the third quarter, while cost of sales dropped to P941.2 million. Income from operations also increased 14% to P228.903 million.
For the first nine months of 2019, Axelum saw its net income grow by 28% to P608.987 million from P475.662 million a year ago. Income from operations also increased 13% to P703.747 million despite a 11% decrease to P3.927 billion in revenues.
The company said sales dropped due to “steep drop in average selling prices and appreciation of the peso compared to 2018.” Axelum said it had to cut its average selling prices to customers to be able to maintain its share in the global coconut market.
“Interestingly, while production volumes were relatively maintained, our margins noticeably improved as we deliberately shifted focus on higher margin products,” Axelum Chairman Mr. Romeo I. Chan said in a statement.
“We are convinced of carrying this momentum into the fourth quarter, where we have historically benefitted from the holiday consumption uptick,” he added.
The company also increased its focus on research and development of new products, which include pressed coconut water, and organic coconut milk powder.
Axelum said that it will continue to upgrade its manufacturing capacity, expand its reach, develop new products, and look into strategic acquisitions and other ventures.
Axelum conducted its initial public offering earlier this year. It is a manufacturer of desiccated coconut, coconut milk powder, coconut cream, coconut water, creamed coconut, reduces fat coconut, coconut oil, and virgin coconut oil to name a few.
Its products are being used by international companies who produce well-known brands like Vita Coco, The Hershey Co., ConAgra Foods, Kellogg’s, Quaker, Nestlé, Russell Stover, Unilever, Kroger, Mondelez International, Ferrero, Kraft Foods, General Mills, Campbell’s, Mars, Cadbury Schweppes, and Calbee, to name a few.
Shares in Axelum were down 0.02 point or 0.49% to P4.07 each in the stock exchange on Monday. — Vincent Mariel P. Galang
