D&L sees 10% rise in 2016 earnings

MANILA, Philippines – D&L Industries, a manufacturer of specialty plastics, food ingredients and oleochemicals, sees its net earnings growing by 10 percent this year despite the uncertainties on the global and local fronts.

Last year, the company posted a net income of P2.28 billion.

D&L executive vice president and chief finance officer Alvin Lao said the Philippines is not exempt from what is happening globally.

“We have to be conservative. It’s less than the previous years…The market has been down. There seems to be more uncertainty,” Lao said.

He said D&L could get a clearer picture of the 2016 business environment after the second half of the year.

For the first quarter, the company reported a 12 percent increase in net income to P576 million.  Revenues, however, dipped four percent to P4.63 billion owing to lower prices.

“The company continues its favorable product mix shift to higher margin specialty products. Contribution of high margin specialties to revenues increased to 64 percent from 62 percent in  2015,” D&L said.

As a result, overall gross profit margin reached another all time-high of 19.2 percent from 16.9 percent the previous year,” the company said.

Strong growth in the company’s specialties business drove earnings upward.

In the food ingredients business, D&L sees a mix-driven transformation, in favor of high margin specialties, which now account for 60 percent of overall revenues.

For the oleochemicals and other specialty chemicals, overall revenues remained largely flat, although net income increased by 34 percent, driven considerably by margins, which continue to rise as the company seizes more value in its oleochemical exports.

 For its specialty plastics, the engineered polymers experienced good recovery with revenues up by 14 percent on the back of strong volume growth. Net income, for this segment, inched up by one percent.

Meanwhile, the aerosols business has recovered following a weak fourth quarter and is now seeing good growth in terms of volumes and margins. 

“Sales remained largely flat, with margins remarkably up driven by home care and maintenance chemicals,” D&L said.