D&L Industries, Inc. is expected to bounce back by the second half of the year due to the gradual resumption of most industries and pent-up demand from consumers.

In a statement Thursday, the listed manufacturer of plastics, food ingredients and specialty chemicals said it was already noticing recovery since last month when the lockdown in Metro Manila was slowly lifted.

“In May, we saw a pick up in activity due to pent-up demand and as some restrictions were eased by the middle of the month. We expect further recovery in June as more and more of our customers are ramping up operations under [a relaxed lockdown],” D&L President and Chief Executive Officer Alvin D. Lao said.

“We are optimistic that improvements might be seen in the third quarter, but may still be below pre-COVID levels. A reasonable recovery might be more probable in the fourth quarter as Christmas period in the Philippines sets in as early as September,” he added.

D&L posted a 31% drop in net income in the first quarter at P515 million. The decline was attributed to lower demand for its high margin specialty products as affected by local lockdowns. Revenues slipped 3% to P5.67 billion, which came from a shift in sales mix to commodities.

Despite this, D&L said its export business remained resilient due to sustained demand for its coconut-based products. “The interest in coconut oil continues to gain traction in the global market due to its perceived natural antiviral and antibacterial properties,” it said.

“The company sees continued strong coconut oil exports, which should offset some of the weakness in the domestic market in the near term. [D&L] plans to capitalize on this trend as it develops more products and penetrates more markets globally,” it added.

Heading towards the end of the year, D&L said fourth quarter revenues may be boosted by Christmas celebrations, noting the social culture of Filipinos may make it easier for consumer demand to recover.

“We love gatherings and meeting up with friends and family. I can sense that there’s still a lot of pent-up demand right now. So this could be positive once restrictions are eased further,” Mr. Lao said. “This should help the country recover faster than most countries.”

He noted, however, that what might alter this growth path is a second wave of COVID-19 cases, which may bring back strict quarantine measures.

The Philippines has a total of 27,238 COVID-19 cases as of Wednesday, of which 19,310 are active, 6,820 are recovered and 1,108 are dead.

Shares in D&L at the stock exchange slipped 25 centavos or 4.67% to P5.10 each on Thursday. — Denise A. Valdez

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