D&L Industries sees sustained recovery until next year
By Denise A. Valdez, Senior Reporter
D&L Industries, Inc. is hopeful to see better results in 2021 as businesses learn to adapt better to government measures against the coronavirus pandemic.
The listed manufacturer of food ingredients, specialty plastics and chemicals reported on Monday a net income of P573 million in the third quarter, lower by 7% from the same period a year ago, but double the P287 million it recorded the previous quarter.
In a virtual media briefing, D&L President and CEO Alvin D. Lao said the company has been steadily improving after the challenging first semester, and is optimistic that the uptrend will be sustained until the end of the year.
“We’re optimistic about [the] fourth quarter. We think the growth we saw in the third quarter will most likely continue as more people [get used to the pandemic],” Mr. Lao said.
“In 2021, kasi wala na yung (because we’re likely to eliminate the) very bad second quarter, performance should be better than 2020. But it’s not clear yet if we can get to the same level as 2019,” he added.
The company posted P5.75-billion sales during the three-month period, down 4% from a year ago. Exports contributed P1.8 billion or 32% to total sales, up 11 percentage points from 21% in third quarter 2019.
By business segment, net income from the chemicals business (down 2% to P226 million), specialty plastics (down 0.5% to P135 million) and consumer products (up 72% to P89 million) have all reached close to or beyond their levels in the same period in 2019. However, the food segment continued to struggle, posting a net income 38% lower at P155 million.
Mr. Lao attributed this to the altered consumer habits, as many people still would not or could not go out because of the ongoing pandemic. He noted many restaurants are still either closed or on limited capacity.
For the nine months beginning January, D&L’s net income is down 32% to P1.37 billion, as sales fell 4% to P15.92 billion.
Net income in three business segments declined for the nine-month period: food ingredients by 52%, chemicals by 24%, and specialty plastics by 27%.
The consumer products segment, which accounts for revenues from the sale of alcohol and disinfectant products, was the only one to see growth, with its net income up 38% year-on-year.
To support growth, D&L continues to invest in the expansion of its 26-hectare plant in Batangas, which is scheduled to finish construction by end-2021. The company has so far spent P1.72 billion for capital expenditures this year, already exceeding its end-2019 spending of P1.53 billion.
D&L previously said it was targeting above P1 billion earnings in the second half of 2020. Its earnings in the first half reached P802 million, down 43% from last year.
Shares in D&L at the stock exchange closed at P6.63 each on Monday, up nine centavos or 1.38% from the last session.