Chemrez posts 7% profit hike

MANILA, Philippines - Chemrez Technologies Inc., the country’s top biodiesel, resins and oleochemicals producer, reported a seven-percent increase in net profit from P474 million in 2009 to P509 million in 2010.

In a report to the Philippine Stock Exchange, ChemrezTech said the jump in income could be attributed to the increase in revenues for the review period.

For 2010, ChemrezTech’s consolidated sales reached P5.8 billion, up by 14 percent from P5.1 billion in 2009.

But the company noted that its sales volume went down by seven percent from 2009 with the heightened competition in the biodiesel industry.

The company, however, improved its export sales three times to P991 million last year compared to export sales value of P328 million in 2009.

“Aggressive overseas marketing boosted our export sales and expanded our markets to US, Africa, EU and Australia. Furthermore, the growth in exports was driven by the high demand for oleochemicals in overseas markets,” the company said. Seventeen percent of the company’s sales came from exports.

ChemrezTech’ gross profit went up by seven percent to P759 million in 2010, resulting in a slightly lower gross profit margin of 13 percent versus 14 percent in 2009.

“The slight decrease in gross margin was because of the company’s inability to increase its prices as fast as the raw materials costs increase,” the company said.

Meanwhile, expenses decreased by eight percent from P91 million in 2009 to P83 million in 2010.

The drop in selling expenses could be traced to the improvement in receivables collection wherein provisions for impairment in receivables have substantially decreased in 2010 compared to 2009.