Chemrez posts 26% profit hike

MANILA, Philippines - Chemrez Technologies Inc., the country’s top biodiesel, resins and oleochemical producer, reported that its consolidated net income jumped by 26 percent to P468 million in 2009 from P372 million  in 2008.

The company attributed the improvement in earnings to sales growth despite the global economic crisis and the impact of strong typhoons in 2009.

The green technology innovator said its net profit margin improved to nine percent from eight percent in 2008 while earnings per share increased to 35 centavos from 28 centavos in 2008.

ChemrezTech attributed the increase in profit to the 10-percent gain in consolidated sales to P5.1 billion in 2009 from P4.66 in 2008.

“This was due to higher sales volume, primarily the approval of the two-percent biodiesel mandate or B2 effective February 2009 and higher sales of other oleochemicals,” ChemrezTech said. 

The company sold more biodiesel in 2009 than in 2008 but, profit margin for this product decreased substantially due to intense competition.

Oleochemical products other than biodiesel, which are mostly exports, experienced robust growth and good prices due to the high demand for amides and esters which are used for the manufacture of detergent, soap and cosmetic products.

ChemrezTech’s export sales rose 11 percent to P510 million last year from P460 million in 2008 — representing 10 percent of total sales for both 2009 and 2008.

Chemrez’s gross profit surged by 34 percent to P710 million in 2009 from the P528 million in 2008 due mostly to lower raw material costs in 2009 compared to 2008. 

On the other hand, its operating expenses grew by a slower 28 percent to P162 million in 2009 from P126 million in 2008. 

The increase in operating expenses was due mostly to an increase in marketing expenses like delivery charges and higher administrative expenses as a result of the higher biodiesel mandate.