DaBomb Protein Biotech Corp. returns to profit in first quarter; new capacity to come online in second half, further expanding operations.

[ DaBomb Protein Biotech Corp. (6578) First Quarter 2024 Financial Results Press Release] Release Date: May 7, 2024

DaBomb Protein Biotech Corp. (Taiwan OTC Stock Code: 6578) today announced its operating results for the first quarter of 2024.

Key Summary:

• First-quarter revenue was NT$101 million, representing year-on-year growth of 1.8% and quarter-on-quarter growth of 0.5%. Net profit attributable to the parent company was NT$6.848 million, with earnings per share (EPS) of NT$0.10, marking the first quarterly profit turnaround in nearly three years.
• The expansion of the 20KL fermentation production line is progressing as expected, and revenue is expected to be boosted in the fourth quarter.

Retrospect and Outlook:

DaBomb Protein Biotech Corp. operations are steadily improving, with first-quarter revenue reaching NT$101 million, representing year-over-year and quarter-over-quarter growth of 1.8% and 0.5%, respectively. While raw material cost fluctuations and fewer working days in February resulted in a slightly lower gross margin compared to the previous quarter, it still significantly improved by 13 percentage points year-over-year to 18%. Benefiting from foreign exchange gains, net profit attributable to the parent company was NT$6.488 million, with earnings per share (EPS) of NT$0.1, marking the first quarterly profit in nearly three years. DaBomb diversified product portfolio continues to optimize, and profitability has improved significantly after the Zhangzhou plant stopped incurring losses. With new functional additive production capacity coming online in the second half of the year, and with expectations of stable revenue growth and further increases in gross margin, a steady increase in performance is anticipated this year.

DaBomb Protein Biotech Corp. has three main product lines: protein raw materials, functional additives, and pet health products, all of which possess considerable market competitiveness. Protein raw materials, which currently account for the largest share of revenue, are expected to see significant sales growth this year, driven by a new distributor in Vietnam. The main customers for functional additives are large US-based global animal health and nutrition strategy companies. DaBomb Protein Biotech Corp. current orders are primarily for export to Asian countries. To prepare for increased orders in the future, the company will optimize its production equipment and intelligent warehouse management system. The expansion of the 20KL fermentation production line is progressing as expected and is anticipated to contribute to revenue in the fourth quarter.

Pet health products are launched under the proprietary brand "Mengtaiyou" in major pet physical stores and e-commerce channels. Since the establishment of the pet business unit in March, the products have received a positive market response in conjunction with the launch of pet health products. Although the revenue share of pet health products is still low at present, the company will continue to enrich its product line and strengthen B2B cooperation in the future to increase the growth momentum of pet health product revenue.

Following the shutdown of its Zhangzhou plant, DaBomb Protein Biotech Corp. 's Tainan plant is gradually showing improved profitability. Looking ahead to the second quarter, with raw material prices trending downwards and marketing expenses gradually returning to normal, gross margins are expected to rebound, driving profit growth. To mitigate the risk of raw material cost fluctuations, DaBomb Protein Biotech Corp. is actively developing high-margin functional additive products. Combined with the commissioning of new production capacity, the benefits of product mix optimization will be more pronounced in the fourth quarter.