Delfi Limited reported a set of results that met our expectations. 2Q16 revenue was down 7.5% YoY to US$106.3m, while in constant currency terms, underlying revenue was down 4.4%. PATMI (excluding exceptional items in 2Q15) was up 3% to US$8.1m. For 1H16, revenue was down 5.1% to US$209.9m while PATMI (excluding exceptional items in 2Q15) was up 5.4% to US$16.6m, meeting 50% and 52% of our full year estimates respectively.

1H16 gross profit margin of 32.6% improved by 2.8ppt due to higher sales of premium Own Brands products, price adjustments as well as ongoing cost containment initiatives. Pending an analyst briefing later, we place our fair value of S$2.15 under review, and keep our SELL rating for now.

Separately, an interim dividend of 1.83 Scents/share has been declared, representing a 50% payout.  

Source: OCBC Research - 11 Aug 2016