DNL hoping to maintain growth momentum in 2018

D&L Industries, Inc. (DNL) aims to book at least P3.2 billion in earnings in 2018, after sustaining a 10.6% growth last year due to stronger volumes from high margin specialty products (HMSP).

The listed plastics, food chemicals, and aerosol manufacturer reported on Tuesday its net profit stood at P2.9 billion in 2017, higher than the P2.63 billion it realized the year prior. This followed a 25% increase in sales to P27.8 billion for the period.

The food ingredients group accounted for bulk of DNL’s earnings at 36%, followed by the Chemrez group at 32%, specialty plastics at 23%, and aerosols at 6%.

“We see that our full year results better reflect the long-term growth prospects of the business. Going forward, we will continue to exercise discipline and excellence in R&D as we continue to target opportunities in the growing Philippine economy, as well as in our rapidly expanding export segments,” DNL President and Chief Executive Officer Alvin D. Lao said in a statement.

Sales from DNL’s export business accounted for 25% of its total revenues for 2017, higher than its 18% contribution in 2016. The company attributed this increase to its partnerships with United States food manufacturer Ventura Foods and Bunge Agribusiness Singapore Pte. Ltd. DNL said the food business is its the fastest-growing export segment.

The company is currently present in China, Thailand, Vietnam, and Indonesia, primarily through Ventura Foods.

“There’s a lot of optimism among our customers, we’re also positive… We think that we have had good success in exports. We are actually doing a lot of test shipments already. We are always talking to more customers that we want to sell to,” Mr. Lao said during a media briefing in Makati yesterday.

In the fourth quarter, DNL’s net income grew 12% to P786 million, while revenues also climbed 25% to P7.84 billion.

“We believe that we will maintain this momentum... (outlook for 2018 is) double-digit growth. That is something that we are quite positive, we will try our best,” Mr. Lao said.

HMSP volume growth, which Mr. Lao explained is a better gauge for the company’s growth, rose 10.5% in the fourth quarter of 2017. This year, he said the company is keeping targets for HMSP growth at a conservative 7%, which has been the company’s average growth per quarter for the past three years.

DNL has also allotted around P500 million in capital expenditures for 2018, 16% higher than the P430 million it spent in 2017. The funds will be used primarily for existing facilities.

Mr. Lao said the capex does not include its plans for expansion in Batangas yet.

Shares in DNL gained 2.39% or 28 centavos to close at P12 apiece at the Philippine Stock Exchange on Tuesday. —