Chemrez reported a whopping profit of P480.6M, which is a five fold increase from last owing to:
Record performance of the Philippine economy in 2007 and the implementation of the mandated one-percent biodiesel blend under the Biofuels Act of 2006.
Chemrez Technologies Inc is the pioneering biodiesel producer in the Philippines. 36% of their profit from this year was contributed by their production of biodiesel while the rest was due to their other core business of resin and powder coating production.
Despite this good news however it failed to uplift Chemrez performance in the Philippine Stock Market as it followed the current trend of dipping stock values due to the down turn in the US economy brought about by the high budget deficit caused by the Iraq war plus the teetering credit sector caused by reckless credit approval by the financial sector in real estate mortgages.
But the good news for them is that it will help make their stock buy back plan easier to accomplish because stock prices aren’t reflecting the true value and historical performance of the stock. With the seemingly guaranteed shift to biodiesel use by the Philippine Economy, it places Chemrez in the very import first-mover position. On my personal opinion, I think Chemrez stock is more of a long term investment for investors.
At 1% mandatory mixing, biodiesel processing by Chemrez contributed 36% to their bottom line. Wait till we hit two percent mandatory mixing, that will increase their profit even further.
[source]
Category: Biodiesel
