Coconut products maker Axelum Resources Corporation, a new affiliate of Metro Pacific Agro Ventures, reported a net loss of P69.26 million in the first quarter of 2023 from a net profit of P181.93 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said it generated sales of P1.36 billion in the first quarter of the year—18.5 percent lower than the P1.67 billion posted in the comparative period of 2022.
Axelum said its coconut water segment remains strong, posting 27 percent revenue growth year-on-year, supported by a robust growth outlook for the rest of 2023.
However, the firm experienced softer demand for desiccated coconut, as key customers slowed down production due to higher-than-usual inventory.
Food manufacturers beefed up inventory when shipping costs tempered late last year, while pushing back initially scheduled orders for first quarter 2023 to subsequent quarters.
As a result, Axelum said its order pipeline is busy particularly for desiccated coconut in the second half of the year.
“Axelum believes that weaker performance in first quarter 2023 is a legacy of the pandemic-induced shipping crisis that impacted global supply chains,” the firm said.
Excluding foreign exchange adjustments, which includes valuations of dollar-denominated assets, core net loss stood at P39.6 million.
“COVID-19 had a profound effect on supply chains across the world, and most importantly for our industry, which led to elevated freight costs and longer shipping times,” said Axelum President and COO Henry J. Raperoga.
He added that, “As the situation eased up towards the end of last year, we were able to supply customers their requirements as they ramped up production, which served as safety stock going forward.”
“For first quarter 2023, we saw customers temporarily pause to digest accumulated inventory. In the coming months, we expect a more normalized environment with steady orders and production output,” Raperoga noted.
To date, Axelum is preparing to launch a new line-up of food and beverage products both locally and overseas, aligned with its strategy of accelerating its consumer business.
Moreover, Axelum expects increased production volumes particularly for coconut water to meet higher demand during summer months in the United States.
Axelum continues to invest in building strategic capabilities to boost production capacity and capitalize on modern technology.
“Our products continue to gain mainstream awareness within a growing population of consumers that advocate for plant-based nutrition, not to mention innovative non-food commercial applications across various industries. As such, we remain confident in our long-term growth outlook despite prevailing global headwinds,” said Raperoga.