International Flavors & Fragrances (IFF) has reported 15.66 percent fall in profit for the quarter ended Sep. 30, 2016. The company has earned $89.78 million, or $1.12 a share in the quarter, compared with $106.45 million, or $1.31 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $107.29 million, or $1.34 a share compared with $112.66 million or $1.39 a share, a year ago. 

Revenue during the quarter went up marginally by 1.56 percent to $777 million from $765.09 million in the previous year period. Gross margin for the quarter contracted 81 basis points over the previous year period to 44.56 percent. Total expenses were 84 percent of quarterly revenues, up from 79.52 percent for the same period last year. That has resulted in a contraction of 448 basis points in operating margin to 16 percent.

Operating income for the quarter was $124.34 million, compared with $156.71 million in the previous year period.

"In the third quarter, we continued to drive the execution of Vision 2020," said chairman and chief executive officer Andreas Fibig. "In the key areas we’ve identified" encapsulation, modulation, North America, Africa and the Middle East" we continue to make progress against our strategic goals. We also accelerated our efforts in M&A recently, with the addition of approximately $160 million in expected annualized sales from David Michael and Fragrance Resources" both of which complement our strategic vision well.

For financial year 2016, International Flavors & Fragrances forecasts revenue to grow in the range of 2.50 percent to 3.50 percent. The company forecasts operating income to grow in the range of 1.50 percent to 2.50 percent.                       

The company has spent $66.24 million cash to meet investing activities during the nine month period as against cash outgo of $546.07 million in the last year period. It has incurred net capital expenditure of $69.89 million on net basis during the nine month period, up 6.27 percent or $4.12 million from year ago period.

Cash flow from financing activities was $65.78 million for the nine month period, down 1.65 percent or $1.10 million, when compared with the last year period.

Cash and cash equivalents stood at $498.73 million as on Sep. 30, 2016, up 83.17 percent or $226.45 million from $272.28 million on Sep. 30, 2015.

Working capital increases
International Flavors & Fragrances has recorded an increase in the working capital over the last year. It stood at $1,001.11 million as at Sep. 30, 2016, up 5.22 percent or $49.68 million from $951.43 million on Sep. 30, 2015. Current ratio was at 2.17 as on Sep. 30, 2016, down from 2.38 on Sep. 30, 2015.

Days sales outstanding were almost stable at 68 days for the quarter, when compared with the last year period.

Days inventory outstanding has decreased to 62 days for the quarter compared with 127 days for the previous year period.