Splash Corp posts 15-fold profit surge in Jan-June

Splash Corp., a leading local manufacturer of beauty and skin care products, said yesterday its net profit in the first six months this year jumped more than 15-fold to P158.05 million on robust sales of nearly all its products.

Splash said gross revenues rose 17 percent to P1.74 billion, mainly coming from new products launched during the early part of the year, which include a hot oil treatment for hair.

Biolink VCO, a hot oil treatment product being positioned as a substitute to hair conditioners, was an instant success, driving the Biolink brand to a four percent sales growth from 2006 levels.

Other hair product lines such as Kolours and Extract likewise registered an impressive 92.5-percent and 81.1-percent growth, respectively,” Splash said.

The company’s major brands – Extraderm, Maxipeel, Skin White and Biolink – account for more than 80 percent of Splash’s total revenues.

In terms of market share, both Extraderm and Maxipeel hold a combined 86 percent of the exfoliant sub-category while Skin White and Biolink dominate the skin-whitening sub-category with a market share of 41 percent.

“We are very pleased about the growth in the various product lines already existing and the ones that have been newly introduced into the market. Even more importantly, the company is looking forward to a successful IPO (initial public offering) in October or November, which would be a vehicle to better service and the regional market. The continued exceptional financial performance is an excellent indicator towards this direction,” said Splash vice-president and chief financial officer Noel P. Manucom.

He said the company expects to sustain its profitability for the rest of the year with the second half accounting for more than 50 percent of total sales volume, driven by a string of new and innovative products.

He said lower operating expenses also led to a surge in operating income from P23.61 million to P168.31 million. Operating expenses dropped to P514.82 million.

Splash is eyeing to raise between P2 billion and P2.5 billion from its planned IPO, which will be managed by First Metro Investment Corp. (FMIC) and SB Capital Corp.

Proceeds from the offering will be used to fund brand development, marketing and expansion overseas.

While it targets the Asia-Pacific market for its skin care products, Splash is also looking at the North American and European markets for its health care products such as the flavored virgin coconut oil product under the brand name TheraHerb Virgin Coconut Oil.

International exports currently contribute 10 percent to the company’s revenues, or about P280 million to P320 million. By 2010, international operations are seen to contribute 25 percent to Splash’s total revenues.

The company’s products are available in Bahrain, Iran, Kuwait, Oman, Qatar, Saudi Arabia, Sudan and the UAE. In Asia, the Splash brand is visible in Hong Kong, Malaysia, Singapore, Vietnam, Brunei, Saipan, South Korea, and Taiwan.

Since its inception in 1985, Splash has become a P5-billion enterprise, placing it among the country’s 300 largest corporations. It now has a total of 350 direct employees and another 1,000 in affiliated companies.