D&L Industries earns 20% more in Q1

MANILA, Philippines - D&L Industries Inc., a leading manufacturer of customized food ingredients, grew its earnings by a fifth in the first three months of the year due to strong sales volume in both specialty products and commodities.

New products from recent partnership deals are recording higher sales that will help improve the company’s revenues in the next few years, the company said.

Consolidated net income rose 20 percent to P377 million in the first quarter from P314 million as all business segments reported better performance. Revenues surged 34 percent to P3.1 billion from P2.31 billion year-on-year due to improved volume and higher commodity prices.

“With the recovery in commodity prices, coupled with the stronger growth momentum volume, year-to-date consolidated revenues increased by 34 percent year-on-year,” D&L Industries said.

“The past four consecutive quarters have seen average sequential topline growth of five percent on the back of increasing volume, shifting product mix and increasing commodity prices,” it added.

In particular, volume and margins of specialty food ingredient remained strong in the first quarter. High margin specialty products accounted for 64 percent of the group’s overall sales while low margin commodities accounted for 36 percent.

“It was a strong start to the year overall, setting us on a good trajectory for the remainder of the year. This was marked by sustained double-digit volume gains and consistent margin improvements in key high margin specialty businesses, including Chemrez Technologies,” D&L Industries said.

The strength of the domestic consumer food and beverage market allowed the company to post higher volume for the food ingredients as customers expand production facilities, add store outlets and extend their product lines.

“Going forward, upbeat consumption outlook and the need to bring to market more new products in a shorter timeframe will continue to drive innovation and margin opportunities for oleo-fats,” D&L Industries said.

Plastics volume recovered in the first quarter as the company focused on value-added product that delivered margin gains to the engineered polymers, which accounted for the largest business of the plastics group.

Chemrez Technologies said its topline growth rose in the first quarter particularly for the oleochemicals segment, “driven by the successful innovation in non-biodiesel application of oleochemicals that currently includes home care and personal care,” D&L Industries said.

“Maybe in the next three years, [the new products] will have a significant impact, around five percent contribution to revenues and income,” said Alvin Lao, executive vice president and chief finance officer of D&L Industries.

Last year, D&L Industries partnered with Omya Mineral Philippines Inc., making it the authorized distributor of Omya’s wide range of calcium carbonate products in the Philippines. D&L Polymer and Colours Inc. and Japan’s leading chemical engineering company Showa Denko K.K. also signed an original equipment manufacturing agreement covering the compounding, manufacturing and distribution of Bionolle Starcla, a biodegradable plastic.

D&L Industries is principally into the manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use. To date, the company, which was established in 1963, has more than 500 food ingredient formulations.