D&L INDUSTRIES, INC. reported a 2% increase in second-quarter (Q2) net income to P714 million, supported by strong results from its Batangas plant and export business amid elevated coconut oil prices.
Sales for the period rose 22% to P12.34 billion from P10.14 billion a year earlier, it said in a statement on Tuesday.
For the first half, D&L saw a 6% increase in its net income to P1.4 billion as sales climbed by 40% to P26.61 billion.
The Batangas plant booked P597 million in net income for the first half, up by more than threefold from the same period last year, and ahead of expectations of achieving breakeven within the first two years of operations.
Export revenue climbed by 18% to P7.4 billion and accounted for 28% of total revenue. D&L aims to increase this share to 50% over the medium term.
The food ingredients division saw a 52% drop in net income due to the surge in coconut oil prices.
Chemrez Technologies, Inc. saw a 28% volume growth, which led to the doubling of net income for the first half after coming off a low base last year, driven by increasing global demand for coconut oil-derived products and the higher biodiesel blend.
Earnings of the specialty plastics division were flat after a high base and strong performance last year.
Consumer products ODM (original design manufacturing) saw a 45% earnings growth with the continued ramp-up of the Batangas plant.
“If we just did the same net income in the second half versus the first half, we’ll be well above the 10% growth in net income. It will be 19% (growth). We’ll see. There’s a higher chance of exceeding rather than going below our income (growth) target,” D&L Chief Executive Officer and President Alvin D. Lao said during a virtual briefing.
Mr. Lao said D&L is set to benefit from easing inflation and expectations of further interest rate cuts, which could stimulate economic activity and consumer spending.
“With coconut oil prices appearing overstretched, the second half is expected to benefit from more stable and potentially lower prices, supporting a stronger earnings performance compared to the first half. We maintain our outlook for double-digit net income growth for the year,” he said.
He also said D&L does not anticipate a material impact from the higher US tariffs, as the US market accounts for only approximately 3% of total revenue. On Aug. 7, the US started charging a 19% tariff on goods from the Philippines.
He said the majority of products sold to the US are valued for their distinct technical and functional attributes, adding that exports will remain a key growth driver for the company.
D&L is also exploring new markets and applications, particularly those where coconut oil’s natural and sustainable profile serves as a key competitive advantage, to grow its exports business and mitigate risks.
“Our focus remains on executing our growth strategy, expanding into new markets, and strengthening our competitive position to capture the significant opportunities we see both locally and globally. We are committed to delivering sustainable value for shareholders and remain confident in the company’s long-term prospects,” Mr. Lao said.
D&L shares rose by 2.89%, or 14 centavos, to P4.99 per share on Tuesday. — Revin Mikhael D. Ochave
