D&L profit surges in 1st half

MANILA, Philippines — D&L Industries, the listed food ingredients and chemicals manufacturer, reported a net income of P1.6 billion in the first half of the year, up 17 percent.

This is already above pre-COVID-19 income levels, D&L president and CEO Alvin Lao said in a press conference yesterday.

In the second quarter alone, net income grew 22 percent  to P851 million, driven by the continued economic reopening that was felt in all of the company’s segments.

Lao said that while challenges remain due to rising COVID-19 cases, most of the cases are mild.

“The government’s shift away from a lockdown strategy should bode well for continued economic growth and business optimism,” he said.

“Our company is benefiting from renewed business momentum amidst economic reopening and pent up demand from the past two years. Barring any unforeseen event, we will likely at least match our record full-year income booked in 2018,” Lao said.

However, D&L noted that margins have experienced temporary contraction given the rapid increase in commodity prices over a short period of time.

Lao said margins are expected to normalize and recover once commodity prices start to stabilize.

Exports continue to be a bright spot for D&L, Lao said, and the company aims to eventually bring to 50 percent the share of the export business in total revenues.

The exports division continued its positive momentum in the first half with revenues jumping 69 percent year-on-year.

Exports contribution to total revenues in the first half stood at 34 percent, a reflection of the company’s commitment to diversifying its revenue base by strategically growing its international customer base.

Moving forward, D&L remains committed to its Batangas manufacturing facility expansion, which is set to start commercial operations in January 2023.

D&L has made several additions and upgrades to the original plan, which resulted in an increase in the budgeted capital expenditures to P10.2 billion from P9.1 billion.

As of end-June, the company spent around P7.8 billion for the project.