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Davis Commodities Limited Announces Fiscal Year 2024 Financial Results

1. DTCK revenue decreased 30.6% to $132.4 million in FY2024. 2. Gross profit fell 66.9%, resulting in $2.3 million. 3. Net loss reached $3.5 million, a significant downturn. 4. Operational challenges include regulatory constraints and supply chain issues. 5. Future growth strategies focus on market expansion and partnerships.

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FAQ

Why Very Bearish?

Significant decrease in revenue and profit signals ongoing operational struggles and market challenges, similar to past commodity depressions, which negatively affected stock prices.

How important is it?

Severe revenue and profit drops indicate significant operational risk and investor concerns, impacting DTCK's market valuation directly.

Why Short Term?

Immediate financial results will likely deter investors, evident from past responses to similar performance declines.

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SUGARRICECORN
SINGAPORE, April 30, 2025 (GLOBE NEWSWIRE) -- Davis Commodities Limited (Nasdaq: DTCK) (the "Company" or "Davis Commodities"), an agricultural commodity trading company that specializes in trading sugar, rice, and oil and fat products, today announced its financial results for the fiscal year 2024. Ms. Li Peng Leck, Executive Chairperson and Executive Director of Davis Commodities, commented, “Despite the challenges posed by fluctuations in commodity prices and shipping costs, we remain confident in our ability to navigate these temporary headwinds. Our robust logistics supply chain is designed to mitigate the impact of such fluctuations, ensuring a steady flow of operations. Looking ahead, we are committed to expanding our market presence by strengthening our position in existing markets and exploring opportunities in new territories. This strategic approach not only supports growth but also helps diversify regional risks. Furthermore, by leveraging our longstanding relationships with trusted business partners, we aim to seize opportunities in emerging markets, driving long-term value and resilience.” Fiscal Year 2024 Financial Results  •Revenue was $132.4 million for the year ended December 31, 2024, compared to $190.7 million for last fiscal year, representing a decrease of 30.6%.    •Gross profit was $2.3 million for the year ended December 31, 2024, compared to $7.0 million for last fiscal year, representing a decrease of 66.9%.    •Loss from operations was $3.7 million for the year ended December 31, 2024, compared to income from operations of $1.1 million for last fiscal year.    •Net loss was $3.5 million for the year ended December 31, 2024, compared to net income of $1.1 million for last fiscal year.    •Basic and diluted loss per share was $0.14 for the year ended December 31, 2024, compared to earnings per share of $0.04 for the last fiscal year.    Revenue Total revenue was $132.4 million for the year ended December 31, 2024, representing a decrease of 30.6% from $190.7 million for last year. This decrease was primarily attributable to a moderation in sales of sugar and rice products across key markets, particularly in Southeast Asia and Africa.   For the year ended December 31,   2022  %  2023  %  2024  %   US$’000     US$’000     US$’000                       Sale of sugar $154,757   74.9  $116,443   61.0  $86,599   65.5 Sale of rice  34,200   16.5   26,440   13.9   18,680   14.1 Sale of oil and fat products  17,568   8.5   47,623   25.0   26,642   20.1 Sale of others  192   0.1   218   0.1   448   0.3 Total revenue $206,717   100.0  $190,724   100.0  $132,369   100.0                           In 2024, our operations in the sugar, rice and palm oil sectors faced a decline in revenue, driven by a range of supply chain disruptions, rising cost, regulatory challenges, and shift in market demand.  •Revenue from sales of sugar was $86.6 million, a decline of 25.6% from $116.4 million in 2023. The sugar segment saw lower volumes due to regulatory constraints and the limited availability of USD payments in certain African countries.    •Revenue from sales of rice was $18.7 million, down 29.3% from $26.4 million in 2023. Rice sales were affected by ongoing restrictions on exports from India, which disrupted sourcing and impacted pricing competitiveness.    •Revenue from sales of oil and fat products was $26.6 million, a decrease of 44.1% from $47.6 million in 2023. Sales of oil and fat products, which had grown significantly in the prior year, adjusted during 2024, reflecting a normalization in demand and pricing.    •Revenue from sales of other products (e.g., creamer and tomato puree) was $0.4 million, reflecting a 105.5% growth from $0.2 million in 2023. Sales of other products, consisting primarily of creamer and tomato puree, reflect a gradual expansion in niche product offerings.    A breakdown of revenue by geographic regions for the fiscal years ended December 31, 2024 and 2023 is summarized below:   For the year ended December 31,   2022  %  2023  %  2024   %   US$’000     US$’000     US$’000                       Africa $56,863   27.5  $80,637   42.3  $68,448   51.7 China  16,629   8.0   17,731   9.3   11,957   9.0 Indonesia  79,645   38.5   22,502   11.8   12,672   9.6 Vietnam  28,663   13.9   9,109   4.8   6,999   5.3 Philippines  3,237   1.6   19,372   10.2   2,850   2.2 Thailand  1,980   1.0   13,119   6.9   12,989   9.8 Singapore  8,808   4.3   18,889   9.9   10,105   7.6 Other countries  10,892   5.2   9,365   4.8   6,349   4.8 Total revenue $206,717   100.0  $190,724   100.0  $132,369   100.0                            •Africa remained our largest contributor, accounting for approximately $68.4 million, or 51.7% of total revenue, representing a decrease of approximately $12.2 million, or 15.1%, compared to the year ended December 31, 2023.    •China contributed approximately $12.0 million, or 9.0%, decrease approximately $5.8 million, or 32.6%.    •Indonesia recorded approximately $12.7 million, or 9.6%, reflecting a decrease of approximately $9.8 million, or 43.7%.    •Philippines recorded approximately $2.9 million, or 2.2%, reflecting a decrease of approximately $16.5 million, or 85.3%.    •These four regions represented the most material changes in our geographic revenue mix for the year.    Cost of Revenue Our cost of revenue decreased by approximately $53.7 million, or 29.2%, to approximately $130.0 million for the year ended December 31, 2024, from approximately $183.7 million for the year ended December 31, 2023. The decrease was mainly driven by lower costs across all major product segments. The cost of sugar sales fell by approximately $27.7 million, or 24.5%, while rice and oil and fat products declined by approximately $6.7 million, or 26.6%, and $19.4 million, or 43.0%, respectively. The decline reflects lower sales volumes, product mix changes, and softer raw material prices. The cost of others, primarily creamer and tomato puree, rose slightly in line with increased sales volume, amounting to approximately $0.4 million. Gross Profit and Gross Margin For the year ended December 31, 2024, our gross profit decreased by approximately $4.7 million, or 66.9%, to approximately $2.3 million, compared to approximately $7.0 million for the year ended December 31, 2023. Gross margin declined to 1.8% from 3.7%, due to lower sales volumes, reduced pricing flexibility, and higher input costs arising from commodity price fluctuations and supply chain disruptions. Operating Expenses Operating expenses of the Company were $6.0 million for fiscal year 2024, which increased by 2.4% from $5.9 million for fiscal year 2023.  •Selling and marketing expenses decreased by approximately $0.7 million, or 29.4%, to approximately $1.7 million, compared to approximately $2.4 million for the year ended December 31, 2023. This decrease was mainly due to lower sales commissions and reduced business development activities.    •General and administrative expenses increased to approximately $4.3 million, compared to approximately $3.4 million for the year ended December 31, 2023, and approximately $2.3 million for the year ended December 31, 2022. The increase in 2024 was primarily attributable to higher listed company-related expenses, which accounted for approximately 35.4% of the total general and administrative expenses. These included legal and professional fees, listing fees, and other associated costs such as transfer agent fees, director fees, investor relations, audit fees and consultancy fees. In addition, an allowance for expected credit losses of approximately $0.3 million was recognized in 2024.    Other Income and Interest Expense Other income was $0.5 million for fiscal year 2024, which increased by 143.4% from $0.2 million for fiscal year 2023. This increase was primarily due to an increase in interest income charged to a related party compared to the previous fiscal year 2023. Interest expense increased by approximately $0.023 million, or 20.9%, from approximately $0.11 million for the year ended December 31, 2023 to approximately $0.13 million for the year ended December 31, 2024. The increase was mainly due to full-year interest accrued to a related party, compared to interest that only began accruing from July 2023. The Company also acquired a motor vehicle in 2023 under a finance lease arrangement, which resulted in additional interest expense. Net Income Taking into account all of the above, the Group recorded a net loss of approximately $3.5 million for the year ended December 31, 2024, compared to a net income of approximately $1.1 million for the year ended December 31, 2023 and approximately $4.6 million for the year ended December 31, 2022. Financial Condition As of December 31, 2024, the Company had cash and cash equivalents of $0.68 million, compared to $1.3 million as of December 31, 2023. Net cash used in operating activities was approximately $0.8 million, primarily reflecting our net loss of approximately $3.5 million, as positively adjusted by (i) non-cash expenses such as depreciation, unrealized loss on derivative contract at fair value, allowance for expected credit losses of approximately $0.3 million, and interest expenses totaling approximately $0.1 million, and (ii) a decrease in accounts receivable of approximately $9.4 million. These were offset by (i) a decrease in accounts payable, accruals and other payables of approximately $6.2 million, (ii) a decrease in income tax payable and lease liabilities totaling approximately $0.7 million, and (iii) an increase in margin deposits of approximately $0.04 million. Net cash used in investing activities was approximately $0.01 million, primarily for administrative and operational purpose. Net cash provided by financing activities was approximately $0.1 million, mainly attributable to advances from a related party of approximately $0.5 million, partially offset by repayment of bank borrowings of approximately $0.2 million, finance lease repayments of approximately $0.03 million and interest payments totaling of approximately $0.09 million. About Davis Commodities Limited Based in Singapore, Davis Commodities Limited is an agricultural commodity trading company that specializes in trading sugar, rice, and oil and fat products in various markets, including Asia, Africa and the Middle East. The Company sources, markets, and distributes commodities under two main brands: Maxwill and Taffy in Singapore. The Company also provides customers of its commodity offerings with complementary and ancillary services, such as warehouse handling and storage and logistics services. The Company utilizes an established global network of third-party commodity suppliers and logistics service providers to distribute sugar, rice, and oil and fat products to customers in over 20 countries, as of the fiscal year ended December 31, 2023. For more information, please visit the Company’s website: ir.daviscl.com. Forward-Looking Statements Certain statements in this announcement are forward-looking statements. These forward-looking statements involve known and unknown risks and uncertainties and are based on the Company’s current expectations and projections about future events that the Company believes may affect its financial condition, results of operations, business strategy and financial needs. Investors can find many (but not all) of these statements by the use of words such as “approximates,” “believes,” “hopes,” “expects,” “anticipates,” “estimates,” “projects,” “intends,” “plans,” “will,” “would,” “should,” “could,” “may,” or other similar expressions. The Company undertakes no obligation to update or revise publicly any forward-looking statements to reflect subsequent occurring events or circumstances, or changes in its expectations, except as may be required by law. Although the Company believes that the expectations expressed in these forward-looking statements are reasonable, it cannot assure you that such expectations will turn out to be correct, and the Company cautions investors that actual results may differ materially from the anticipated results and encourages investors to review other factors that may affect its future results in the Company’s registration statement and other filings with the U.S.Securities and Exchange Commission.     DAVIS COMMODITIES LIMITED AND ITS SUBSIDIARIESCONSOLIDATED BALANCE SHEETS(Amount in thousands, except for share and per share data, or otherwise noted)      As of December 31,   2023  2024   US$’000  US$’000 Assets        Current assets:        Cash and cash equivalents  1,330   678 Accounts receivable, net  15,267   7,692 Prepaid expenses and other current assets, net  6,131   3,521 Inventory  537   319 Total current assets  23,265   12,210 Property, plant and equipment  633   578 Right-of-use asset  73   37 Loan to a related party, net  5,907   5,972 Other receivable – non-current, net  –   891 Total non-current assets  6,613   7,478 TOTAL ASSETS  29,878   19,688          Liabilities        Current liabilities:        Bank loans - current  207   219 Lease payable - current  36   37 Finance lease - current  29   29 Accounts payable  14,323   9,134 Accruals and other current liabilities  3,850   2,236 Income taxes payable  713   35 Total current liabilities  19,158   11,690 Bank loans – non-current  323   103 Lease payable – non-current  38   – Finance lease – non-current  101   72 Deferred tax liabilities  –   – Amount due to a related party  –   1,096 Total non-current liabilities  462   1,271 TOTAL LIABILITIES  19,620   12,961          Commitments and contingencies  –   – Shareholders’ equity        Ordinary shares US$0.000000430108 par value per share; 232,500,000,000 authorized as of December 31, 2023 and 2024; 24,500,625 shares issued and outstanding**  *   * Additional paid-in capital  3,151   3,151 Merger reserve  1,113   1,113 Retained earnings  5,981   2,452 Accumulated other comprehensive income  13   11 Total shareholders’ equity  10,258   6,727 TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY  29,878   19,688  *Retrospectively restated for the effect of a 2,325-for-1 share subdivision**Denotes amount less than US$’000.       DAVIS COMMODITIES LIMITED AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF OPERATIONS AND COMPREHENSIVE INCOME(Amount in thousands, except for share and per share data, or otherwise noted)      For the years ended December 31,   2022  2023  2024   US$’000  US$’000  US$’000 Revenues  206,717   190,724   132,369 Cost of revenues  (193,840)  (183,695)  (130,044)Gross profit  12,877   7,029   2,325 Operating expenses:            Selling and marketing expenses  (5,307)  (2,439)  (1,723)General and administrative expenses  (2,287)  (3,443)  (4,302)Total operating expenses  (7,594)  (5,882)  (6,025)Income/(loss) from operations  5,283   1,147   (3,700)             Other income/(expense):            Other income  285   198   482 Interest expense  (33)  (110)  (133)Total other income  252   88   349 Income/(loss) before tax expense  5,535   1,235   (3,351)Income tax expense  (920)  (149)  (178)Net income/(loss)  4,615   1,086   (3,529)Other comprehensive (loss)/income            Foreign currency translation (loss)/gain, net of taxes  (2)  8   (2)Total comprehensive income/(loss)  4,613   1,094   (3,531)Net income/(loss) per share attributable to ordinary shareholders            Basic and diluted $0.20  $0.04  $(0.14)Weighted average number of ordinary shares used in computing net income per share            Basic and diluted*  23,250,000   24,500,625   24,500,625  *Retrospectively restated for the effect of a 2,325-for-1 share subdivision       DAVIS COMMODITIES LIMITED AND ITS SUBSIDIARIESCONSOLIDATED STATEMENTS OF CASH FLOWS(Amount in thousands, except for share and per share data, or otherwise noted)      For the years ended December 31,   2022  2023  2024   US$’000  US$’000  US$’000 Net income/(loss)  4,615   1,086   (3,529)Adjustments:            Depreciation and amortization  58   62   96 Unrealized loss on derivative contract at fair value  218   –   14 Allowance for expected credit losses  –   500   254 Impairment loss for damaged inventory  –   16   – Bad trade debts written off  –   2   * Interest expense  33   103   129 Interest expense on finance lease  –   2   4 Interest expense on lease liability  *   5   – Interest income  (56)  (88)  (384)   4,868   1,688   (3,416)Changes in operating assets:            (Increase)/decrease in inventories  (2,082)  1,624   218 Decrease/(increase) in margin deposits  559   571   (41)Decrease/(increase) of accounts and other receivables  4,146   (10,808)  9,398 (Increase)/decrease in deferred offering costs  (1,129)  1,129   – (Decrease)/increase in accounts and other payables, and accruals  (8,727)  8,253   (6,221)Decrease in amount due from directors  *   –   – Decrease in operating lease liabilities  –   (3)  (37)Increase/(decrease) in income tax payable  419   (645)  (678)Cash (used in)/ provided by operating activities  (1,946)  1,809   (777)             Interest received  56   88   – Purchase of property, plant and equipment  (14)  (296)  (5)Cash provided by/(used in) investing activities  42   (208)  (5)             Advances from related parties  *   –   453 Loan to a related party  –   (5,907)  – Issuance of share capital  *   *   – Dividend paid  (3,001)  –   – Net proceeds from offering  –   3,151   – Proceeds from bank borrowings  575   –   – Proceeds from finance lease  –   144   – Repayment of bank borrowings  (146)  (155)  (208)Interest paid  (33)  (28)  (82)Principal payment of finance lease  –   (14)  (29)Principal payment of lease liabilities  (38)  –   – Payment of interest on finance lease  –   (2)  (4)Payment of interest on lease liabilities  *   –   – Cash (used in)/provided by financing activities  (2,643)  (2,811)  130              Net change in cash and cash equivalents  (4,547)  (1,210)  (652)Cash and cash equivalents as of beginning of the year  7,087   2,540   1,330 Cash and cash equivalents as of the end of the year  2,540   1,330   678              Supplementary Cash Flows Information            Cash paid for taxes  (499)  (791)  (856)Operating lease asset obtained in exchange for operating lease obligations  –   150   – Dividend that was offset against loan assumed by shareholder/director  (671)  –   – *Denotes amount less than US$’000.   Forward-Looking Statements This press release contains forward-looking statements that are based on the management’s current expectations, estimates, and assumptions about future economic conditions, industry performance, company operations, and financial results. These statements are not guarantees of future events or performance and involve a number of risks and uncertainties. Actual results could differ materially from those anticipated in the forward-looking statements due to factors such as changes in economic conditions, market trends, industry developments, and operational factors. There can be no assurance that the expected events or outcomes will occur as anticipated.

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