D&L Industries hikes Q1 profit

MANILA, Philippines - D&L Industries Inc., the country’s top manufacturer of customized food ingredients, grew its profits 19 percent in the first quarter, driven by its high-margin specialized products.

New businesses will allow D&L to further jack up its earnings in the next three quarters, the company said in a disclosure to the stock exchange.

In a regulatory filing, the firm said consolidated net income hit P314 million, up 19 percent from a year ago.

“Revenues were 27 percent lower at P2.3 billion as the group continued to strategically sell less of its big volume, low margin refined vegetable oils in favour of its high margin specialty products,” D&L said.

Lower sales also mirrored the pass-through of lower raw material costs with easing prices of coconut oil and palm oil.

However, it was offset by higher earnings from high-value products, which accounted for 69 percent of sales from 67 percent a year ago.

Hence, gross profit margin rose 6.4 percentage points to 19.2 percent while net income margin increased 5.2 percentage points to 13.5 percent. The margins were also aided by lower commodity prices.

“In the coming quarters, earnings growth is expected to accelerate due to income from new businesses,” D&L said.

Early this year, D&L and its subsidiaries entered into marketing and distribution deals with Swiss firm Omya for calcium carbonate and leading Australian food ingredients firms Manildra Group and MSM Milling for high oleic canola and canola meal.

It also signed an original equipment manufacturing agreement with Japan’s leading chemical engineering company Showa Denko K.K. Under the deal, D&L Polymer will provide a full scope of services including export supply and local sales.

“Overall, the company remains in line with expectations this year,” D&L said.

D&L sees another banner year with profits expected to hit P1.38 billion this year as it focuses on high-margin specialty products.

The listed company breached the P1-billion mark for the first time in terms of consolidated income, surging 34 percent to P1.33 billion last year.

D&L customizes food ingredients, plastics, biodiesel and aerosols. The company is principally into the manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.

To date, D&L, which was established in 1963, has more than 500 food ingredient formulations in four primary businesses: specialty fats and oils, refined vegetable oils, speciality ingredients and food safety products.