International Flavors Fragrances (IFF) has reported 2.39 percent fall in profit for the quarter ended Mar. 31, 2017. The company has earned $115.76 million, or $1.45 a share in the quarter, compared with $118.60 million, or $1.47 a share for the same period last year. On the other hand, adjusted net income for the quarter stood at $121.12 million, or $1.52 a share compared with $116.37 million or $1.45 a share, a year ago. Revenue during the quarter grew 5.74 percent to $828.29 million from $783.31 million in the previous year period. Gross margin for the quarter contracted 196 basis points over the previous year period to 44.03 percent. Total expenses were 83.41 percent of quarterly revenues, up from 78.31 percent for the same period last year. That has resulted in a contraction of 510 basis points in operating margin to 16.59 percent.
Operating income for the quarter was $137.44 million, compared with $169.93 million in the previous year period.
However, the adjusted operating income for the quarter stood at $163.51 million compared to $167.18 million in the prior year period. At the same time, adjusted operating margin contracted 160 basis points in the quarter to 19.74 percent from 21.34 percent in the last year period.
"We are pleased to report that our first quarter sales growth was strong and in line with our expectations," said IFF chairman and chief executive officer Andreas Fibig. "Sales performance was broad-based, driven by the contribution of our recent acquisitions and a strong performance in Flavors, where we achieved growth across all categories and regions.
International Flavors Fragrances forecasts adjusted revenue to grow in the range of 6 percent to 7 percent for for fiscal year 2017. For financial year 2017, the company forecasts adjusted operating income to grow in the range of 3 percent to 4 percent.
Operating cash flow drops significantly
International Flavors Fragrances has generated cash of $21.70 million from operating activities during the quarter, down 45.67 percent or $ 18.24 million, when compared with the last year period. The company has spent $162.19 million cash to meet investing activities during the quarter as against cash outgo of $21.15 million in the last year period. It has incurred capital expenditure of $26.04 million on net basis during the quarter, up 23.16 percent or $4.90 million from year ago period.
Cash flow from financing activities was $113.73 million for the quarter, down 65.64 percent or $217.22 million, when compared with the last year period.
Cash and cash equivalents stood at $300.07 million as on Mar. 31, 2017, down 43.26 percent or $228.81 million from $528.88 million on Mar. 31, 2016.
Working capital drops significantly
International Flavors Fragrances has witnessed a decline in the working capital over the last year. It stood at $725.61 million as at Mar. 31, 2017, down 38.44 percent or $453.17 million from $1,178.78 million on Mar. 31, 2016. Current ratio was at 1.74 as on Mar. 31, 2017, down from 2.65 on Mar. 31, 2016.
Days sales outstanding went down to 64 days for the quarter compared with 67 days for the same period last year.
Days inventory outstanding has decreased to 59 days for the quarter compared with 128 days for the previous year period.
Debt moves up marginally
International Flavors Fragrances has witnessed an increase in total debt over the last one year. It stood at $1,552.09 million as on Mar. 31, 2017, up 3.22 percent or $48.44 million from $1,503.65 million on Mar. 31, 2016. Total debt was 36.50 percent of total assets as on Mar. 31, 2017, compared with 36.12 percent on Mar. 31, 2016. Debt to equity ratio was at 0.95 as on Mar. 31, 2017, up from 0.92 as on Mar. 31, 2016. Interest coverage ratio deteriorated to 10.73 for the quarter from 13.62 for the same period last year.
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