LISTED manufacturing firm D&L Industries, Inc. saw its first-quarter net income rise by 35% to P695 million year on year as the profitability of its business units recovered.

In a press release on Wednesday, the manufacturer of food ingredients, specialty plastics and chemicals said that its net income for the three months ending March was 9% higher quarter on quarter.

All of its business segments posted “significant recoveries” in their net income, with food ingredients improving by 37% to P219 million, chemicals increasing by 17% to P207 million, and specialty plastics growing by 27% to P181 million on a year-on-year basis.

“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,” the firm said.

It said companies engaged in the food ingredients sector are now better prepared to serve customers by providing them with take-out and delivery options.

The firm added that its bottom line for the quarter was boosted by P32 million because of the lower income taxes under the Corporate Recovery and Tax Incentives for Enterprises (CREATE) Act.

The CREATE law lowers the corporate income tax (CIT) rate for local companies to 25% of their taxable income from July 1 onwards. The CIT of companies that hold assets not exceeding P100 million and taxable income not exceeding P5 million is lowered to 20% of their taxable income.

“Compared to pre-pandemic levels, 1Q21 (first quarter 2021) income seems to be tracking ahead of FY19 (fiscal year 2019) income but still slightly behind FY18 income,” D&L noted.

The company does not expect the extension of the second strictest lockdown level in the capital region and nearby areas to be “as damaging as last year” since it is less restrictive this time around.

“Assuming that 1Q21 income holds steady in the next couple of quarters, the company is set to at least reach its net income level in 2019,” D&L said.

On Wednesday, the company also said that it had so far spent P4.5 billion for its Batangas facility that will serve its growing exports in the food and oleochemicals segments. It plans to spend the remaining P3.5 billion of its capital expenditure budget until early 2022.

The project is aimed at boosting D&L’s capacity to manufacture downstream packaging, and help it capture a bigger part of the production chain.

Two months ago, the company said that its board of directors had greenlit a plan to offer peso-denominated fixed-rate bonds of up to P5 billion to finance its expansion project in Batangas.

Shares in D&L at the stock exchange closed at P7.66 each on Wednesday, up by 28 centavos or 3.79% from the last session. — Angelica Y. Yang