LISTED chemical firm SBS Philippines Corp. said net income in 2015 rose by nearly 60 percent to P159 million due to organic growth in operating profit and lower finance charges.
“The Company expects revenue growth to accelerate this year as it anticipates stronger demand for chemicals in 2016. The Company expects to continue to deliver solid profit growth as it improves its operating margin through growth in higher margin products, cost reductions and other efficiencies,” SBS Philippines said in a statement.
Operating profit, or those derived from its main business, grew by 40 percent last year aided by increases in “other income” while finance charges dropped as the company settled several monetary obligations during the period.
Sales revenue was nearly flat at P940 million from the P933.1 million recorded in 2014, with food ingredients, industrial raw materials and feed inputs accounting for 40 percent, 32 percent and 21 percent, respectively.
Sales of food ingredients and industrial chemicals increased by 17 percent and 29 percent, each as the chemical distributor benefitted from the increased chemical consumption by the manufacturing and production sectors amid strong domestic private consumption.
However, feed inputs registered lower sales last year because of soft pricing conditions and tighter competition.
Net profit in the fourth quarter rose 9 percent from a year earlier on lower expenses and increased other income, but sales for the period fell 14.6 percent year-on-year.
The slower sales in the fourth quarter was a “result of the supply chain disruptions
experienced in 2015 where some customers had some difficulty complying with the new stringent regulations affecting their use of certain staple chemicals,” SBS said.
“Moreover, the peso depreciation versus the US dollar also increased the landed cost of chemical supplies, which caused some customers to hold back on their purchases to replenish their inventory purchases,” the company said.
The company said it also expects some price volatility for its chemical products this year as the impact of the drop crude oil prices and commodity prices may begin to be felt in certain sectors in the energy and commodity value chains by the first half of 2016.