D&L Industries lowers targets for 2017 amid minimal 2nd quarter growth

FOOD and plastics firm D&L Industries registered minimal growth in the second quarter of 2017, due to a higher base in the same period last year from electionrelated spending.

In a statement released on Tuesday, the listed company said its net income gained only 1% to P688 million against the P680 million in the same period in 2016. If compared against 2015 figures, D&L’s earnings would have grown at an average of 11% year on year.

Given these figures, D&L President and Chief Executive Officer Alvin D. Lao said they are revising their fullyear double- digit growth target to single-digits.

“We are guiding lower partly because we’ve always been conservative as a company... even though there’s a high base effect from elections we are also seeing some reasons why that growth might slow, so we are seeing a lot of signs that infrastructure in our country is inadequate in a lot of ways,” Mr. Lao said in a press briefing in Makati City on Tuesday.

Revenues for the first half reached P12.7 billion, a 24% uptick due to higher commodity prices.

For the January to June period, recurring net income rose by 7.5% to P1.35 billion.

The company benefited from its partnerships with Ventura and Bunge, making its food ingredients business as the biggest contributor to exports at 42%, which in turn accounted for 23% of the company’s total revenues.

“Moving forward, our growth will continue to be supported by the vibrant domestic economy and still robust consumer spending. Moreover, our exports business offers exciting growth opportunities for us. We remain committed to our R&D investments that support the growing needs of our customers,” Mr. Lao said in a statement.

With a 5% increase in volume in the sale of food ingredients, the segment saw its earnings rise by 7% in the first half.

The oleochemicals and other specialty chemicals booked a 14% earnings growth, defying the weakness of the biodiesel business which slowed by 33% in terms of volumes.

The specialty plastics segment realized flat earnings, despite higher average selling prices pushing revenues 4% higher at P1.39 billion.

Earnings of D& L’s smallest business segment consisting of aerosols edged 36% higher, boosted by an 18% volume growth. Meanwhile, the company announced the appointment of Joselito P. Rivera as its new chief operating officer on Tuesday. This forms part of D& L’s efforts to professionalize its management in preparation for further expansion.

Mr. Rivera was previously the global head for leadership at Ericsson corporate headquarters in Stockholm, Sweden, and held various management positions at Ericsson Philippines.

Asked for expansion plans in the future, Mr. Lao said they will be expanding outside Metro Manila, but noted that they are still in the planning stages.

“We will be expanding outside Metro Manila. Majority of manufacturing growth is in the South, where it seems to attract more growth in terms of buildup for manufacturing,” Mr. Lao said. —