D&L bullish on Q2 prospects

MANILA, Philippines — D&L Industries, the listed specialty foods ingredients, plastics and oleochemicals producer, is optimistic the second quarter will be better for the company than the traditionally slower first quarter.

Its president and chief executive officer Alvin Lao said prices of commodities remain low, which should give consumers more purchasing power.

At the same time, Lao said the second quarter has less working days this year because Holy Week fell on April while it was in March last year.

“While there is more liquidity, the cash requirements of corporations remain the same so banks will have to be more competitive by lowering their rates to be able to lend more,” Lao said in an interview after the firm’s stockholders’ meeting.

Consumer spending is getting a boost from the influx of foreigners in the country, Lao said.

However, Lao said elections had a lesser impact on consumer spending this year because of the delayed budget.

During the stockholders’ meeting on Tuesday, D&L declared cash dividends amounting to P2.04 billion, 10 percent higher than last year. This is equivalent to 64 percent of last year’s recurring income.

The dividends consist of a regular cash dividend of P0.223 per share plus a special cash dividend of P0.063 per share to shareholders of record as of June 26. Ex-date is on June 21 and payment will be made on July 22.

In all, shareholders will receive P0.286 dividends per share, equivalent to a dividend yield of 2.8 percent based on June 7’s closing price of P10.20.

Last year, the company posted a recurring net income of P3.2 billion up 10 percent year-on-year.This was due to higher sales volume and gross profit margin expansion.

In the first quarter, meanwhile, net income increased one percent year-on-year to P748 million. This is equivalent to earnings per share of P0.10.

Moving forward, Lao said D&L remains highly committed to its dividend policy of 50 percent payout ratio based on previous year’s recurring net income, with an option to declare special dividends.

In fact, the company has returned a total of P8.8 billion in cash to shareholders through dividends since it became a public company in 2012. The company also paid a 100 percent stock dividend in September 2015.