D&L Industries, Inc. said it stands to benefit from the gradual return to normalcy as higher economic activity typically translates to better business for the company.
“In terms of economic activity, it is looking quite good. Knock on wood that no variants will cause restrictions,” D&L President and Chief Executive Officer Alvin D. Lao said during a virtual briefing on Monday.
“A lot of companies whose performance is correlated to the economy should see good performance not just in this quarter, but for the rest of the year,” he said. “It looks like the second quarter will be quite strong in terms of the economy.”
Mr. Lao said that with lower alert levels in place, consumer confidence and mobility continue to pick up as evidenced by the gradual return to normal of road traffic, dining in restaurants, and activity of both domestic and international flights.
“Barring another unforeseen event, simply annualizing the company’s first quarter earnings will yield a projected P3.1 billion in net income for the year, which is already at par with its record net income booked in 2018,” he added.
The company’s Batangas expansion facility will also be operational by January 2023 to support its growing export business.
“The new plant will give D&L additional capacity and upgraded capabilities which will position the company for long-term growth and will enable the achievement of strategic priorities,” the firm said.
On Monday, the company also declared a regular cash dividend of P0.185 per share, plus a special cash dividend of P0.055 per share, to shareholders of record as of June 21.
“This year’s dividend is significantly more than last year’s dividend. Since the initial public offering (IPO), we have declared in cash dividends P13.2 billion. In the last 10 years, we have returned two and a half times the amount raised during the IPO,” Mr. Lao said.
In total, shareholders will receive a P0.24 dividend per share, or a dividend yield of 3.6% based on the June 3 closing price of P6.75.
This year’s dividend amounting to P1.7 billion, or an increase of 26% from last year’s P1.4 billion, is equivalent to 65% of last year’s recurring income. The ex-date is on June 16 and payment will be made on July 15.
The firm said that it is committing to its dividend policy of a 50% payout ratio based on prior year’s net income.
“D&L has also been able to declare special dividends for two years in a row now since it was paused in 2020 due to the uncertainties brought about by the COVID-19 (coronavirus disease 2019) pandemic,” it added.
In the first quarter, net income rose by 12% to P780 million, the highest quarterly income level for the company in three years.
“The strong earnings growth was mainly driven by the continued reopening of the Philippine economy and the implementation of a lower alert level. Consumer confidence and mobility continue to pick up as evidenced by the gradual return to normal of road traffic, dining in restaurants, and activity of both domestic and international flights,” D&L said.
On Monday, D&L shares ended higher by 2.07% or 14 centavos to finish at P6.89 at the stock market. — Luisa Maria Jacinta C. Jocson
