D&L profit up 19% in Jan-Sept

MANILA, Philippines – D&L Industries, a listed manufacturer of specialty plastics, food ingredients and oleochemicals, reported a net income of P1.93 billion in the nine months to September, up 19 percent year on year.

D&L chief executive officer Alvin Lao said there was a broad increase in sales volume and higher prices of palm oil and coconut oil in the third quarter, resulting in a 10 percent rise in sales to P15.5 billion.

Lao said the company was on track to hit its 15 to 19 percent net income growth target this year.

“We’re still maintaining our target,” Lao told reporters yesterday.

In the third quarter alone, net income went up 14 percent to P671 million while recurring net income grew 14 percent.

Lao said there were some expenses last year of P47 million related to taxes and filing costs related to the increase in authorized capital stock in June 2015.

“If you include the effect of these expenses last year, our net income was up 19 percent but the expenses are not part of ordinary business, so we added the expenses back in for the purpose of calculating our recurring income so our recurring net income growth is 16 percent,” Lao said.

Lao said the second quarter was particularly strong owing to election spending and timing of the Easter holiday.

 Going into the second half of the year, all businesses are operating on solid ground and contributing to earnings growth.

D&L has four business segments: food ingredients, oleochemicals & other specialty chemicals, specialty plastics and aerosols.  During the first nine months, revenues of the different segments increased by 12 percent, 15 percent, 25 percent and 42 percent, respectively.

For the food ingredients business, year-to- date specialties volume grew by double-digits. This included a higher volume base for specialty ingredients in the third quarter of 2015 due to customers’ limited time offerings, as well as a seasonal bump in the second quarter.

 For the oleochemicals business, the nine-month volume increased moderately from last year, even with the exceptionally strong comparative period for biodiesel.

“Ongoing efforts to strengthen commercial and operational execution improved the performance of other specialty chemicals. After quarters of weakness, the segment continues to strengthen sequentially and is expected to resume to positive volume growth in the near future,” Lao said.

“Moving in step with changing customer values, the company intends to broaden its portfolio of colorant, additives and related technologies. Further, it aims to extend its reach into strategic end markets such as consumer and durable goods to create a second engine of growth that will complement the core wire harness business,” D&L said.