DaBomb revenue peaked in the fourth quarter of last year, and its core business profitability is expected to remain strong.

After adjusting its operating structure, DaBomb (6578) is gradually showing results. Its consolidated revenue in the fourth quarter reached NT$100 million, a 15.56% increase from the previous quarter, setting a new record for the highest single quarter of the year. Its core business is also expected to turn profitable.

DaBomb , which operates sugarcane dumping operations, reported consolidated revenue of NT$35 million in December, up 2.24% month-on-month and down 5.25% year-on-year; its cumulative consolidated revenue for the year was NT$384 million, down 11.35% year-on-year.

DaBomb stated that although the company's shipments of high-value-added functional additives are not as high as those of its previous protein raw materials, the unit price and gross profit of functional additives are relatively high. While the increase in shipments of functional additives has a limited impact on revenue growth, its contribution to profitability has significantly increased. 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.

Especially after the Zhangzhou plant ceased operations in the third quarter of last year, DaBomb 's revenue continued to rise month by month in the fourth quarter, with December revenue reaching a nearly eight-month high, making the fourth quarter the highest-grossing quarter of the year. The company stated that the revenue in the fourth quarter of last year mainly came from the Tainan plant, while the revenue from the Zhangzhou plant was already quite low. The fact that the fourth-quarter revenue surpassed that of the third quarter indicates that the fourth-quarter revenue growth of the plant was better than the company's overall performance.

According to the financial reports for the first three quarters, the factory turned a profit in the third quarter and made up for the losses in the first half of the year. Revenue in the fourth quarter is expected to rise again, and the factory's profit is expected to surpass that of the third quarter. Moreover, the losses from the Zhangzhou factory will no longer affect the fourth quarter, and DaBomb core business is expected to be profitable in the fourth quarter.

In addition, the benefits of increased shipments of functional additives such as probiotics and enzymes began to emerge last year, and DaBomb has been actively expanding its production capacity to meet the needs of CDMO (Contract Development and Manufacturing Organization) customers. With the first phase of the expanded 20KL fermentation production line expected to begin mass production in the third quarter of this year, the proportion of high-value-added products will further increase. With a more optimized product mix, performance is expected to demonstrate even greater potential.

The above content is excerpted from a news release by Du Huirong in the Commercial Times on January 10, 2024.
https://www.ctee.com.tw/news/20240110701804-430503