D&L sees better H2 as sales pick up

MANILA, Philippines — D&L Industries, the country’s largest specialty foods ingredients, plastics and oleochemicals firm, expects the second half of the year to be much better than the first semester, noting that sales have been recovering since hitting bottom last April due to the pandemic lockdown.

“Despite the challenging first half of the year, we remain optimistic and see a gradual recovery as restrictions ease in the country,”D&L president and chief executive officer Alvin Lao said during an online press briefing.

“We continue to sense that things are getting better each month as more and more of our customers are able to ramp up operations under the new normal. A possible monkey wrench, however, is a second wave that can return us to a stricter quarantine.In June, we started seeing a pick up in activity, albeit still lower than pre-quarantine levels, due to pent-up demand and as the government started easing restrictions by shifting Metro Manila to a general community quarantine (GCQ),” Lao  said.

He said earnings are expected to reach P900 million to P1 billion in the second half, approximating the firm’s performance in January to June which marked only two weeks of lockdown.

D&L reported a recurring income of P802 million during the period, 43 percent lower than last year.  Earnings before interest and taxes were lower by 37 percent year-on-year at P1.2 billion.

In the second quarter alone, net income fell 57 percent  to P287 million due to the unprecedented economic disruptions caused by the COVID-19 pandemic.

While the domestic business has faced adversities on various fronts, the company’s export business continues to show resilient growth.

In the second quarter alone, export sales grew by 41 percent, bringing first half 2020 growth to 25 percent.

Export contribution to total revenues in the second quarter posted a record high of 31 percent. This brings first half export contribution to 26 percent compared to just 19 percent over the same period last year.

Coconut-based products under food and oleochemicals were the main drivers behind the robust export growth. Coconut oil continues to gain traction in the global market due to its perceived natural antiviral, antibacterial, and antifungal properties.

In addition, coconut-based products are great organic and sustainable substitutes for many petroleum-based raw materials used in personal hygiene and home cleaning products.