D&L posts strong Q4 rebound, sees 2021 growth

D&L Industries, the country’s largest specialty foods ingredients, plastics and oleochemicals firm, reported full recovery in the fourth quarter of 2020 and expects earnings to return to pre-COVID levels this year

In a media briefing, D&L President Alvin D. Lao said “recovery continued in the fourth quarter, with earnings growing 8 percent year-on-year (YoY) to P637 million, likely representing an inflection point in earnings growth.”

This brings the second half 2020 net income to ₱1.2 billion, which is 51 percent higher than the P801 million earnings recorded in the first half last year, surpassing the company’s P1 billion target for the period.

Overall, net income for the full year of 2020 (FY20) stood at ₱2 billion, down by 23 percent YoY, coming from a higher 32 percent YoY earnings decline reported in the first nine months of the year.

Lao said “2020 was a challenging year to say the least. But at the same time, these extraordinary conditions further built our resilience and strengthened our conviction in our long-term strategies.”

“It demonstrated the highly relevant nature of our businesses’ catering to basic industries, and our operational adeptness as even in the worst of times, even at the peak of the lockdown, the company never saw negative net income,” he added.

Lao noted that, “In the final quarter of 2020, we managed to surpass pre-COVID performance, with our net income growing 8 percent YoY. This accompanied the gradual opening of the economy and inspires confidence, as it shows that earnings growth is gradually coming back.”

“With better visibility on recovery and with the company being in a stronger operational position, there is reason to believe that our 2021 results will likely be better than 2020,” he said.

With this confidence, Lao said the firm is allotting ₱3.5 billion for capital expenditures this year and ₱500 million to ₱1 billion for 2022 to fund the expansion of its manufacturing facilities in Batangas.

“As a sign of our confidence, we remain committed to our expansion plan in Batangas and the Lao Family continues to buy shares in D&L. The family has acquired about 91 million shares or 1.3 percent of outstanding shares so far since the pandemic started,” he said.

The company’s optimism largely stems from the highly encouraging performance of it’s non-food businesses. As of the fourth quarter of 2020, Chemrez, Specialty Plastics, and ODM for Consumer Products (previously referred to as Aerosols), which combined account for 75 percent of total earnings, are already operating above pre-COVID levels. (James A. Loyola)