D&L hopes to hit 2019 income level this year

MANILA, Philippines — D&L Industries, the listed chemicals and food ingredients manufacturer, hopes to hit 2019 income level this year with its business nearly back to normal.

In a press briefing yesterday, D&L president Alvin Lao said the easing of quarantine restrictions, along with the resumption of public transportation services, have spurred consumption spending.

If there will be no hard lockdown again and public transportation will continue, consumption spending will sustain its momentum and bring D&L’s net income back to 2019 level.

The company posted a recurring net income of P2.6 billion last year.

“Compared to pre-pandemic levels, first quarter 2021 income seems to be tracking ahead of full year 2019 income, but still slightly behind full year 2018. Assuming that first quarter income holds steady in the next couple of quarters, the company is set to at least reach its net income level in 2019,” Lao said.

Against this backdrop, the company is boosting its war chest with a plan to issue P3 billion in bonds with an oversubscription option of P2 billion.

Proceeds will help fund D&L’s new plant in Batangas which is slated for completion this year.

During the company’s annual stockholders meeting yesterday, Lao said the company declared a regular cash dividend of P0.141 per share plus a special cash dividend of P0.05 per share to shareholders of record as of June 21, 2021.

Lao said this is a testament to the company’s confidence in the country’s expected recovery from COVID-19.

“Management remains highly committed to its dividend policy of a 50 percent payout ratio based on prior year’s net income. In addition, the company has resumed payment of a special dividend after it was paused last year due to the uncertainty brought about by the COVID-19 pandemic.

For the first three months of the year, the company posted recurring earnings growth of 35 percent year-on-year and nine percent quarter-on-quarter to P695 million.

“The recovery was mainly driven by people and businesses gradually adapting to the new normal. With more than a year into the pandemic, D&L, as well as many of its customers, has found new ways to continuously operate despite various mobility restrictions. This is true, not just for the chemicals segment, but also for the food ingredients space wherein many food companies are now better-equipped to service customers on a 100 percent takeout or delivery basis,” the company said.

D&L caters to basic essential industries such as food, oleochemicals, plastics and cleaning chemicals.