D&L Industries, Inc. (DNL) expanded its recurring income by 14% to P784 million in the three months ending June, driven by higher volumes for the high margin specialty product (HMSP) segment of its food business.
The listed manufacturer of customized food ingredients and specialty raw materials said in a statement on Thursday that this pushed the first-half recurring income 13% higher to P1.53 billion. Revenues, meanwhile, stood at P13.2 billion, four percent higher year-on-year.
The earnings for the first half translate to an earnings per share of 21 centavos.
DNL attributed the profit growth to the 14% increase in volumes from the food unit’s HMSPs, which accounted for 63% of total revenues. The company noted the segment’s growth for the period is twice its historical average increase of seven percent.
“The pick-up in HMSP is encouraging as it represents the side of the business that is recurring and sticky,” the company said. This allowed a two percent year-on-year increase for the food ingredients segment.
The commodity business meanwhile contributed 37% of total revenues. Blended commodity margins climbed to 9.7% for the second quarter alone, versus four percent in the previous quarter, pushing overall gross profit margin to 18% in the first half, one percentage point higher year-on-year.
Exports accounted for 21% of DNL’s revenues, indicating a five percent drop due to the higher base it recorded in the same period a year ago. Oleochemical products — which are chemicals processed from coconut oil — were the top contributor to exports at 35%, as the company saw strong demand for high margin coconut-derived oleochemicals from developed countries.
The company earlier said it targets to have its export business contribute half of its total revenues by 2025, as it prepares to enter new markets in the Asia-Pacific region.
Shares in DNL rose 20 centavos or 1.89% to close at P10.76 each at the stock exchange on Thursday. — Arra B. Francia