Financial Results Davis Commodities Limited Reports Fiscal Year 2025 Performance
Davis Commodities Limited (OTC: DTCKF), a Singapore-based agricultural commodity trading company specializing in sugar, rice, and oil and fat products, has announced its financial results for the fiscal year ended December 31, 2025, highlighting a significant rebound in revenue driven by stronger global demand and expanded market activity, particularly across Africa and China. Despite this top-line recovery, the company continued to face profitability challenges due to persistent margin pressure, rising procurement costs, supply chain disruptions, and slower receivables collections in certain markets.
Executive Chairperson and Executive Director Ms. Li Peng Leck described 2025 as a year of operational recovery and strategic progress, noting that the company remained focused on strengthening its core commodity trading operations while simultaneously laying the foundation for future growth through diversification initiatives.
“In 2025, we delivered a strong recovery in revenue and continued to execute on our strategic priorities across both our core trading operations and new growth initiatives,” said Li. “Demand strengthened in key markets, particularly Africa and China, while higher trading volumes in sugar and rice supported a meaningful rebound in top-line performance.”
She added that although market conditions remained challenging, management continued implementing initiatives aimed at improving liquidity, strengthening working capital management, and enhancing long-term sustainability.
A notable strategic development during the year was the company’s expansion into the fast-moving consumer goods (FMCG) sector. According to management, the launch of consumer-facing products and their entry into major retail channels in Singapore marked an important milestone toward building a more diversified and resilient business model.
Revenue Surges Nearly 40%
For fiscal year 2025, Davis Commodities reported total revenue of $184.2 million, representing a 39.2% increase from $132.4 million recorded in 2024.
The substantial growth was primarily driven by stronger sales of sugar and rice products, fueled by increasing demand across key African markets and significant sales expansion in China.
By product category:
- Sugar revenue climbed to $127.7 million, up 47.4% from $86.6 million in 2024, mainly due to higher trading volumes.
- Rice revenue rose sharply to $34.1 million, an increase of 82.4% compared to $18.7 million in the prior year, reflecting stronger customer demand and expanded trading activity.
- Oil and fat product revenue declined to $22.4 million, down 15.8% from $26.6 million, largely due to softer market demand and changes in trading priorities.
- Revenue from other products, including the company’s newly launched FMCG business, totaled approximately $40,000, compared with $400,000 in 2024.
Africa and China Lead Geographic Growth
Africa remained the company’s largest market, contributing approximately $110.5 million, or 60% of total revenue, representing a 61.4% increase compared to 2024.
China emerged as the fastest-growing region, with revenue increasing to $37.1 million, or 20.1% of total revenue, reflecting a remarkable 210.4% year-over-year increase.
However, not all markets showed growth:
- Revenue from Indonesia fell sharply after the company failed to secure import tenders during the year.
- Vietnam revenue declined to $1.1 million from $7.0 million.
- Thailand revenue decreased to $7.7 million from $13.0 million, primarily due to reduced trading activity and regulatory constraints.
Cost of Revenue Rises with Sales Expansion
Cost of revenue increased substantially to $181.3 million, up 39.5% from $130.0 million in 2024, largely in line with increased sales volumes.
The rise was also influenced by:
- Higher procurement prices
- Increased logistics costs
- Product mix changes
- Ongoing supply chain disruptions
Cost breakdown included:
- Sugar: $126.8 million, up 48.4%
- Rice: $32.7 million, up 75.7%
- Oil and fat products: $21.9 million, down 14.8%
Gross Profit Improves, But Margins Tighten
Gross profit increased to $2.9 million, up 23.4% from $2.3 million in 2024.
However, gross margin narrowed slightly to 1.6%, compared with 1.8% in the prior year, highlighting ongoing pricing pressure and elevated operating costs.
By segment:
- Sugar gross profit fell to $0.9 million, with margin dropping to 0.7% from 1.4%.
- Rice gross profit improved significantly to $1.4 million, with margin expanding to 4.2%, compared to just 0.5% in 2024.
- Oil and fat gross profit declined to $0.5 million, with margin falling to 2.4%.
- The FMCG segment recorded a modest gross loss due to startup-related costs.
Operating Expenses Increase
Operating expenses rose to $8.1 million, compared to $6.0 million in fiscal 2024.
The increase was largely driven by higher general and administrative expenses, including:
- Legal and professional fees increased to $2.1 million from $1.4 million, due to work related to the company’s Form F-3 filing, dual-class share structure implementation, and consulting services.
- Expected credit loss allowance surged to $1.8 million, compared with $0.3 million in 2024, reflecting slower collections and concerns over potential bad debts.
Selling and marketing expenses remained relatively stable at approximately $1.7 million.
Net Loss Widens
As a result of higher operating expenses and ongoing margin pressure, Davis Commodities reported a net loss of $5.0 million for fiscal 2025, compared with a net loss of $3.5 million in 2024.
Basic and diluted loss per share widened to $4.11, compared with $2.88 in the prior year.
The company noted that all share-related figures have been adjusted to reflect its 1-for-20 reverse stock split, which became effective on February 5, 2026.
Balance Sheet and Liquidity Position
Despite reporting a wider loss, Davis Commodities improved its cash position.
Cash and cash equivalents increased to $1.4 million as of December 31, 2025, compared to $0.7 million a year earlier.
Operating cash flow remained negative, with $1.0 million used in operations, primarily due to:
- Net losses
- Increased accounts receivable
- Higher margin deposits
Financing activities provided $1.8 million, largely supported by:
- $27.7 million in new bank borrowings
- $1.7 million from a related party
These were partially offset by debt repayments and lease obligations.
Source Link:https://ir.daviscl.com/
