Delfi Ltd has been downgraded to “fully valued” by DBS Group Research in a note, with a revised target price of SGD0.70, following a significant drop in earnings for the first half of 2025. The company’s earnings fell by 38% year-on-year to $12 million, which accounted for only 41% of the previous full-year forecast, falling short of expectations.
The downgrade comes as Delfi Ltd faces increased distribution costs aimed at maintaining its market share in Indonesia’s challenging consumer market. The company has adjusted its earnings forecast for the fiscal years 2025 and 2026, reducing them by 20% and 29%, respectively. This adjustment reflects the ongoing pressure from higher distribution expenses.
In addition to the earnings decline, Delfi Ltd announced an interim dividend of 1.0 US cent, representing a 51% decrease compared to the previous year, with a payout ratio of 50%. This reduction in dividend highlights the financial strain the company is experiencing.
The downgrade and revised forecasts underscore the challenges Delfi Ltd faces in navigating a weak consumer market in Indonesia. As the company works to defend its market position, the financial outlook remains cautious. The revised target price and earnings projections reflect the need for strategic adjustments in response to the current market conditions.
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