Ms.
Fiscal Year 2023 Financial Results
Revenue
Total revenues of the Company were
For the Fiscal Years Ended | ||||||||||||||
2023 | 2022 | |||||||||||||
(US$ thousands) | Revenue | | Cost of Revenue | | Gross Margin | | Revenue | | Cost of Revenue | | Gross Margin | |||
Sale of sugar | 116,443 | 113,110 | 2.9 | % | 154,757 | 145,071 | 6.3 | % | ||||||
Sale of rice | 26,440 | 25,325 | 4.2 | % | 34,200 | 32,099 | 6.1 | % | ||||||
Sale of oil and fat products | 47,623 | 45,065 | 5.4 | % | 17,568 | 16,489 | 6.1 | % | ||||||
Sale of others | 218 | 195 | 10.6 | % | 192 | 181 | 5.7 | % | ||||||
Total | 190,724 | 183,695 | 3.7 | % | 206,717 | 193,840 | 6.2 | % | ||||||
- Revenue from sales of sugar was
US$116.4 million for fiscal year 2023, which decreased by 24.7% fromUS$154.8 million for fiscal year 2022. This decline was attributable to a decrease in demand for sugar from our customers inSoutheast Asia , notably,Indonesia andVietnam . Additionally, the decrease was linked to the market disruption caused by India’s decision to ban sugar exports.
- Revenue from sales of rice was
US$26.4 million for fiscal year 2023, which decreased by 22.7% fromUS$34.2 million for fiscal year 2022. The decline was a direct consequence of reduced demand for rice, primarily stemming from the export ban imposed by the Indian government. This ban limits the availability of Indian rice in the international market, disrupting the established trade pattern. The Company is actively seeking alternative options for rice sourcing, to mitigate the adverse effects of the export ban on the Company’s revenue stream.
- Revenue from sales of oil and fat products was
US$47.6 million for fiscal year 2023, which increased by 171.0% fromUS$17.6 million for fiscal year 2022. The increase was attributable to the palm oil prices which have experienced a significant upward trend over the past three years, reaching an all-time high in 2022. In 2023, there was a price drop, leading to an increase in demand.
- Revenue from sales of others was
US$0.2 million for fiscal year 2023 The sales of other products were random sales during the year, specifically, sales of tomato puree and creamer.
A breakdown of revenue by geographic regions for the fiscal years ended
For the fiscal years ended | ||||||||||||||||||||||||
(US$ thousands) | 2023 | % | 2022 | % | Amount | Change (%) | ||||||||||||||||||
US$’000 | US$’000 | US$’000 | ||||||||||||||||||||||
$ | 80,637 | 42.3 | 56,863 | 27.5 | 23,774 | 41.8 | ||||||||||||||||||
17,731 | 9.3 | 16,629 | 8.0 | 1,102 | 6.6 | |||||||||||||||||||
22,502 | 11.8 | 79,645 | 38.5 | (57,143 | ) | (71.7 | ) | |||||||||||||||||
9,109 | 4.8 | 28,663 | 13.9 | (19,554 | ) | (68.2 | ) | |||||||||||||||||
19,372 | 10.2 | 3,237 | 1.6 | 16,135 | 499.0 | |||||||||||||||||||
13,120 | 6.9 | 1,980 | 1.0 | 11,140 | 562.6 | |||||||||||||||||||
18,889 | 9.9 | 8,808 | 4.3 | 10,081 | 114.5 | |||||||||||||||||||
Other countries | 9,364 | 4.8 | 10,892 | 5.2 | (1,528 | ) | (14.0 | ) | ||||||||||||||||
Total revenue | $ | 190,724 | 100.0 | 206,717 | 100 | (15,993 | ) | (7.7 | ) | |||||||||||||||
- Revenue from the
Africa market experienced growth of 41.8%. Africa’s contribution to total revenue increased to 42.3% for fiscal year 2023, from 27.5% for fiscal year 2022. The increase was driven by a rise in revenue generated from oil and fat products. The Company strategically engaged with specialized traders in oil and fat products, which contributed significantly to the growth in this market.
- Revenue from
China market demonstrated moderate growth, representing a 6.6% growth. The increase was attributable to the Company’s successful penetration into liquid sugar sales withinChina .
- Revenue from the Indonesian market experienced a decline of 71.7%, which can be attributed to challenges in securing tenders for sugar imports, affecting the Company’s ability to generate revenue from this market.
- Revenue from the
Vietnam market decreased by 68.2%, primarily because inVietnam , the government took action to regulate the impact of the price of imported sugar to their domestic sugar industry by imposing duties and quota restrictions, which led to the decrease in demand.
- Revenue from
the Philippines market increased significantly by 499.0%, primarily due to two key factors. Firstly, industrial users in the country expanded their capacity, leading to higher demand for our products. Secondly, the Philippine government issued sugar import permits in response to a poor local crop yield, which further boosted our revenue in the region.
- Revenue from the
Thailand market showed notable growth, representing a 562.6% increase, which was attributed to the expansion of capacity in Thailand’sExport Processing Zone (EPZ) factories, specifically to cater to the Chinese market. This growth was facilitated by the Free Trade Agreement (FTA) betweenThailand andChina , enabling increased exports toChina from the EPZ factories.
- Revenue from the
Singapore market increased by 114.5%, which was mainly attributed to the expansion of capacity among local general trade and industrial users. This surge underscores the widespread acceptance of our sugar brand in theSingapore market, further contributing to our revenue growth.
- Revenue from other countries decreased by 14.0%. This decrease was a result of a mixed performance across various countries, where some experienced increases while others saw decreases. These fluctuations, although present, were not significant enough to offset the overall decline in revenue.
Cost of Revenue
Cost of revenue was
Gross Profit and Gross Margin
Gross profit was
Gross margin was 3.7% for fiscal year 2023, compared to 6.2% for fiscal year 2022. The decline in gross margin occurred due to procurement and pricing pressures in certain markets, together with rising supply chain costs.
Operating Expenses
Operating expenses of the Company were
- Selling and marketing expenses were
US$2.4 million for fiscal year 2023, which decreased by 54.7% fromUS$5.3 million for fiscal year 2022. The decrease was primarily due to a decrease in sales-related expenses and commissions payable.
- General and administrative expenses were
US$3.4 million for fiscal year 2023, which increased by 47.8% fromUS$2.3 million for fiscal year 2022. The increase was primarily due to an increase in employee benefits, office running cost, legal and professional fees, impairment losses, directors’ and officers’ liability insurance and overseas office expenses.
Other Income and Interest Expense
Other income was
Interest expense was
Profit before Tax and Income Tax Expense
Profit before tax was
Net Income
Net income was
Basic and diluted earnings per share were
Financial Condition
As of
Net cash generated by operating activities was
Net cash used in investing activities was
Net cash used in financing activities was
About
Based in
Forward-Looking Statements
Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the U.S.
For more information, please contact:
Investor Relations Department
Email: investors@daviscl.com
Ascent Investor Relations LLC
Phone: +1-646-932-7242
Email: investors@ascent-ir.com
DAVIS COMMODITIES LIMITED AND ITS SUBSIDIARIES CONSOLIDATED BALANCE SHEETS (Amount in thousands, except for share and per share data, or otherwise noted) | ||||||||
As of | ||||||||
2022 | 2023 | |||||||
US$’000 | US$’000 | |||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | 2,540 | 1,330 | ||||||
Accounts receivable, net | 4,656 | 15,267 | ||||||
Prepaid expenses and other current assets | 7,001 | 6,131 | ||||||
Deferred offering costs | 1,129 | – | ||||||
Inventory | 2,176 | 537 | ||||||
Total current assets | 17,502 | 23,265 | ||||||
Property, plant and equipment | 399 | 633 | ||||||
Right-of-use asset | – | 73 | ||||||
Loan to a related party | – | 5,907 | ||||||
Total non-current assets | 399 | 6,613 | ||||||
TOTAL ASSETS | 17,901 | 29,878 | ||||||
Liabilities | ||||||||
Current liabilities: | ||||||||
Bank loans - current | 157 | 207 | ||||||
Lease payable - current | – | 36 | ||||||
Finance lease - current | – | 29 | ||||||
Accounts payable | 5,096 | 14,323 | ||||||
Accruals and other current liabilities | 4,749 | 3,850 | ||||||
Income taxes payable | 1,357 | 713 | ||||||
Total current liabilities | 11,359 | 19,158 | ||||||
Bank loans – non-current | 528 | 323 | ||||||
Lease payable – non-current | – | 38 | ||||||
Finance lease – non-current | – | 101 | ||||||
Deferred tax liabilities | 1 | – | ||||||
Total non-current liabilities | 529 | 462 | ||||||
TOTAL LIABILITIES | 11,888 | 19,620 | ||||||
Commitments and contingencies | – | – | ||||||
Shareholders’ equity | ||||||||
Ordinary shares | * | * | ||||||
Additional paid-in capital | – | 3,151 | ||||||
Merger reserve | 1,113 | 1,113 | ||||||
Retained earnings | 4,895 | 5,981 | ||||||
Accumulated other comprehensive income | 5 | 13 | ||||||
Total shareholders’ equity | 6,013 | 10,258 | ||||||
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY | 17,901 | 29,878 |
* | Denotes amount less than US$’000. |
** | Retrospectively restated for the effect of a 2,325-for-1 share subdivision. |
DAVIS COMMODITIES LIMITED AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME (Amount in thousands, except for share and per share data, or otherwise noted) | ||||||||||||
For the years ended | ||||||||||||
2021 | 2022 | 2023 | ||||||||||
US$’000 | US$’000 | US$’000 | ||||||||||
Revenues | 194,239 | 206,717 | 190,724 | |||||||||
Cost of revenues | (181,994 | ) | (193,840 | ) | (183,695 | ) | ||||||
Gross profit | 12,245 | 12,877 | 7,029 | |||||||||
Operating expenses: | ||||||||||||
Selling and marketing expenses | (5,396 | ) | (5,307 | ) | (2,439 | ) | ||||||
General and administrative expenses | (1,871 | ) | (2,287 | ) | (3,443 | ) | ||||||
Total operating expenses | (7,267 | ) | (7,594 | ) | (5,882 | ) | ||||||
Income from operations | 4,978 | 5,283 | 1,147 | |||||||||
Other income/(expense): | ||||||||||||
Other income | 671 | 285 | 198 | |||||||||
Interest expense | (48 | ) | (33 | ) | (110 | ) | ||||||
Total other income | 623 | 252 | 88 | |||||||||
Income before tax expense | 5,601 | 5,535 | 1,235 | |||||||||
Income tax expense | (901 | ) | (920 | ) | (149 | ) | ||||||
Net income | 4,700 | 4,615 | 1,086 | |||||||||
Other comprehensive income | ||||||||||||
Foreign currency translation loss, net of taxes | (3 | ) | (2 | ) | 8 | |||||||
Total comprehensive income | 4,697 | 4,613 | 1,094 | |||||||||
Net income per share attributable to ordinary shareholders | ||||||||||||
Basic and diluted | $ | 0.20 | $ | 0.20 | $ | 0.04 | ||||||
Weighted average number of ordinary shares used in computing net income per share | ||||||||||||
Basic and diluted* | 23,250,000 | 23,250,000 | 24,500,625 |
* | Retrospectively restated for the effect of a 2,325-for-1 share subdivision. |
DAVIS COMMODITIES LIMITED AND ITS SUBSIDIARIES CONSOLIDATED STATEMENTS OF CASH FLOWS (Amount in thousands, except for share and per share data, or otherwise noted) | ||||||||||||
For the years ended | ||||||||||||
2021 | 2022 | 2023 | ||||||||||
US$’000 | US$’000 | US$’000 | ||||||||||
Net income | 4,700 | 4,615 | 1,086 | |||||||||
Adjustments: | ||||||||||||
Depreciation and amortization | 54 | 58 | 62 | |||||||||
Unrealized loss on derivative contract at fair value | (389 | ) | 218 | – | ||||||||
Allowance for expected credit losses | – | – | 500 | |||||||||
Impairment loss for damaged inventory | – | – | 16 | |||||||||
Bad trade debts written off | – | – | 2 | |||||||||
Interest expense | 46 | 33 | 103 | |||||||||
Interest expense on finance lease | – | – | 2 | |||||||||
Interest expense on lease liability | 2 | * | 5 | |||||||||
Interest income | (53 | ) | (56 | ) | (88 | ) | ||||||
4,360 | 4,868 | 1,688 | ||||||||||
Changes in operating assets: | ||||||||||||
Decrease/(increase) in inventories | 241 | (2,082 | ) | 1,624 | ||||||||
(Increase)/decrease in margin deposits | (599 | ) | 559 | 571 | ||||||||
(Increase)/decrease of accounts and other receivables | (11,140 | ) | 4,146 | (10,808 | ) | |||||||
(Increase)/decrease in deferred offering costs | – | (1,129 | ) | 1,129 | ||||||||
Increase/(decrease) in accounts and other payables, and accruals | 10,433 | (8,727 | ) | 8,253 | ||||||||
Decrease in amount due from directors | (990 | ) | * | – | ||||||||
Decrease in operating lease liabilities | – | – | (3 | ) | ||||||||
Increase/(decrease) in income tax payable | 910 | 419 | (645 | ) | ||||||||
Cash provided by/(used in) operating activities | 3,215 | (1,946 | ) | 1,809 | ||||||||
Interest received | 53 | 56 | 88 | |||||||||
Purchase of property, plant and equipment | (11 | ) | (14 | ) | (296 | ) | ||||||
Cash provided by/(used in) investing activities | 42 | 42 | (208 | ) | ||||||||
Amount due to related parties | (157 | ) | * | – | ||||||||
Loan to a related party | – | – | (5,907 | ) | ||||||||
Issuance of share capital | – | * | * | |||||||||
Dividend paid | – | (3,001 | ) | – | ||||||||
Net proceeds from offering | – | – | 3,151 | |||||||||
Proceeds from bank borrowings | 256 | 575 | – | |||||||||
Proceeds from finance lease | – | – | 144 | |||||||||
Repayment of bank borrowings | (2,039 | ) | (146 | ) | (155 | ) | ||||||
Interest paid | (46 | ) | (33 | ) | (28 | ) | ||||||
Principal payment of finance lease | – | – | (14 | ) | ||||||||
Principal payment of lease liabilities | (38 | ) | (38 | ) | – | |||||||
Payment of interest on finance lease | – | – | (2 | ) | ||||||||
Payment of interest on lease liabilities | (2 | ) | * | * | ||||||||
Cash (used in)/provided by financing activities | (2,026 | ) | (2,643 | ) | (2,811 | ) | ||||||
Net change in cash and cash equivalents | 1,231 | (4,547 | ) | (1,210 | ) | |||||||
Cash and cash equivalents as of beginning of the year | 5,856 | 7,087 | 2,540 | |||||||||
Cash and cash equivalents as of the end of the year | 7,087 | 2,540 | 1,330 | |||||||||
Supplementary Cash Flows Information | ||||||||||||
Cash refunded/(paid) for taxes | 9 | (499 | ) | (791 | ) | |||||||
Operating lease asset obtained in exchange for operating lease obligations | – | – | 150 | |||||||||
Dividend that was offset against loan assumed by shareholder/director | (2,051 | ) | (671 | ) | – |
* | Denotes amount less than |
Source:
2024 GlobeNewswire, Inc., source