Axelum profit dips 32% on pandemic’s impact

AXELUM Resources Corp. recorded a 32.1% decline in its net income to P526.41 million last year due to the effects of the coronavirus disease 2019 (COVID-19) pandemic to its operations.

Quarantine restrictions hampered production in 2020, the listed coconut manufacturer and exporter said in a regulatory filing on Monday.

Last year’s profit was down from the P774.81-million net income recorded in 2019.

Axelum said its consolidated sales last year fell 2.5% to P5.17 billion from P5.30 billion the earlier year because of the lockdown restrictions.

In 2020, it sold 27.1 million liters of coconut water, an increase of 20% from 22.5 million liters the previous year. The said product accounted for 27% of consolidated sales.

The company said additional costs were also incurred as a result of COVID-19 protocols and mobility limitations that caused an increase in raw and packaging materials costs.

Axelum’s cost of sales for 2020 increased 3.2% to P3.87 billion, against P3.75 billion the year earlier due to raw material prices.

It added that the prices of coconut used for production ranged from P7,200 to P7,700 per metric ton in 2020, higher than the P5,800 to P6,000 per metric ton recorded in 2019.

“Additional costs also were due to the impact of escalating shipping fees, container space constraints and enforcement of intensified health policies to safeguard its workforce including regular COVID-19 testing and shuttle services to seamlessly transport workers,” the company said.

For Axelum President and Chief Operating Officer Henry J. Raperoga, the company has been able to sustain its profitability despite the pandemic by taking advantage of opportunities during its extra downtime to improve its operations.

“[We have been able] to bolster our 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,” Mr. Raperoga said in the disclosure.

According to Axelum, it recently completed the expansion of its spray-drying facility that used agglomerated technology to double the production capacity of coconut milk powder. It expects the move to be a key growth driver for its organic gluten and dairy-free variants due to strong demand in culinary ingredients used for plant-based diets and other applications.

The company said it also commissioned its pressed coconut water plant to fast-track the commercial production of its new coconut water variant, adding that the product continues to have massive appeal in the global market.

On Monday, shares of Axelum at the stock exchange rose 0.29% or one centavo to end at P3.44 apiece.