DaBomb revenue hit a record high for a single quarter last year, and its core business profitability is expected to improve.

DaBomb (6578) announced yesterday (10th) that its consolidated revenue for December 2023 was NT$35 million, up 2.24% month-on-month and down 5.25% year-on-year, a new high in nearly eight months; consolidated revenue for the fourth quarter was NT$100 million, up 15.56% quarter-on-quarter and down 12.53% year-on-year, the highest single-quarter revenue of the year; consolidated revenue for the whole year was NT$384 million, down 11.35% year-on-year. DaBomb stated that with the Zhangzhou plant accounting for a very small percentage of revenue, the fourth-quarter revenue mainly came from the Tainan Science and Technology Plant, with the single-quarter revenue reaching the highest of the year. Considering the operating performance of the Science and Technology Plant, which had already turned profitable in the first three quarters of last year, the company's core business is expected to be profitable in the fourth quarter.

DaBomb pointed out that the company's transformation to develop high-value-added functional additives, while not as high in volume as its previous protein raw material products, has resulted in higher unit prices and gross margins for functional additives. The increase in functional additive shipments has a limited impact on revenue growth, but a significant increase in profit contribution. In the first three quarters of last year, the company's revenue declined by 10.92%, but its gross profit grew by 161.39%, and its gross margin increased by 5.91 percentage points to 8.96%, demonstrating the effectiveness of product portfolio optimization.

DaBomb also pointed out that after the Zhangzhou plant ceased operations in the third quarter of last year, the main source of revenue in the fourth quarter came from the Tainan Science Park plant. The fact that fourth-quarter revenue surpassed that of the third quarter indicates that the Tainan Science Park plant's revenue growth in the fourth quarter was better than the company's overall performance. According to the financial reports for the first three quarters, the Tainan Science Park plant turned a profit in the third quarter and made up for the losses in the first half of the year. With revenue surging again in the fourth quarter, the plant's profits are expected to surpass those of the third quarter. Furthermore, the fourth quarter will not be affected by losses from the Zhangzhou plant, therefore, profitability from the core business in the fourth quarter is promising.

Looking ahead, DaBomb stated that the benefits of increased shipments of functional additives such as probiotics and enzymes began to emerge last year, and the company is also actively expanding its production capacity to meet the needs of CDMO (Contract Development and Manufacturing Organization) customers. It is expected that after the first phase of the 20KL fermentation production line expansion begins mass production in the third quarter of this year (2024), the proportion of high value-added products will increase further, and with a more optimized product mix, the company's performance will further demonstrate explosive growth.

The above content is excerpted from a MoneyDJ news report dated January 11, 2024, at 10:56:48.
https://www.moneydj.com/kmdj/news/newsviewer.aspx?a=3b4c784a-282b-4ccd-ab13-ee2d39ef7845