Coconut products manufacturer Axelum Resources Corp. said its income last year fell 32 percent to P526.41 million from the previous year’s P774.8 million as its cost rose due to its implementation of Covid-19 protocols and the spike in shipping fees.
Revenues fell P5.16 billion from the previous P5.3 billion, but it said the company saw steady performance from its coconut milk powder and desiccated coconut segments and a record volume of coconut water shipments, which grew 20 percent.
Gross and net income margins contracted 25 percent and 10 percent, respectively, as it incurred additional costs in complying with Covid-19 protocols. Mobility limitations and physical distancing also added to the cost of raw and packaging materials.
The company said shipping fees rose due to container space constraints and the enforcement of intensified health policies to safeguard its workforce, including regular Covid-19 testing and the provision of shuttle services to seamlessly transport workers.
“We managed to sustain our profitability by capitalizing on strategic opportunities during extra downtime to bolster manufacturing capabilities and develop new products to anchor long-term growth. At the same time, we strictly implemented health and sanitation policies to prevent virus transmissions, allowing us to operate continuously without interruption,” Henry J. Raperoga, the company’s president and COO, said.
To date, Axelum has reconfigured its nut opening facility to boost capacity by 42 percent, while staying compliant with physical distancing guidelines. Coconut milk extraction procedures were improved translating to increased manufacturing yields for coconut milk powder and coconut milk/cream. Construction of new warehouses is currently underway in anticipation of impending storage requirements, it said.
For 2021, Axelum has allocated approximately P350 million in capital spending, slightly lower than lat year’s spending of P400 million.
The company said the capex this year will be used to fund ongoing and planned plant enhancements, equipment upgrades, new product initiatives and other support projects.
In terms of distribution, Axelum said it is broadening its market reach both domestically and overseas by appointing reputable distributors in high-demand areas. It is also evaluating potential international and local joint-venture partnerships for value-enhancing and strategic purposes.
Read full article on BusinessMirror
