D&L Industries realized a P618-million net income for the first quarter of this year, or a 4% improvement compared to the P594 million of the same period last year.
The company attributed the modest increase in its first-quarter net income to the improving operations of its Batangas facility. D&L Industries is the country’s largest manufacturer of food ingredients and oleochemicals.
“While it is still early days, the Batangas plant has already shown remarkable progress with respect to the ramp up of its operations as well as in surpassing its initial commitments with PEZA (Philippine Economic Zone Authority). With the current run rate, it is possible that we may see break even sooner-than-expected,” said D&L Industries President and CEO Alvin Lao.
First-quarter sales increased by 5% to P8.8 billion from P8.4 billion.
Lao also reported that the company’s export revenues for the first quarter of 2024 jumped 32%, nearing its record-high full-year export growth of 33 percent in 2021. He said that the company’s exports in the first quarter increased by 38% to P2.9 billion from P2.1 billion in the same period last year.
The bulk, or 51%, of the exports are food, followed by oleochemicals at 33%, and specialty plastics at 16%.
Lao said that with the improvement in overseas orders, D&L Industries’ Batangas plant has exceeded its export commitment to PEZA. Based on its pledge to PEZA, at least half of the output from the Batangas plant should be sold to foreign markets.
“Our long-term goal is to eventually hit 50% of revenue coming from exports,” Lao said.
As of March 2024, the Batangas plant has delivered 230% of its first-year commitment to PEZA.
D&L Industries’ latest manufacturing plant began its commercial operation in July 2023. The company spent P10.5 billion to build its newest production facility in Batangas.
From a P315 million loss recorded during the first quarter of commercial operations of the Batangas plant, losses have narrowed drastically to merely P16 million in the first quarter of the current year.
D&L netted P2.3 billion in 2023, down 31% from P3.3 billion of 2022, attributable to the higher expenses related to its Batangas plant.
P5-BILLION BOND OFFERING
With D&L Industries’ improving performance, its P5-billion total outstanding fixed-rate bonds offer has secured the highest credit rating from local debt watcher Philippine Rating Services Corp. (PhilRatings).
A filing with the Philippine Stock Exchange shows D&L’s bonds were rated PRS AAA, the highest rating assigned by PhilRatings, with a stable outlook.
“PhilRatings shall continuously monitor developments relating to D&L and may change the rating and outlook at any time, should circumstances warrant a change,” the company said, noting that the ratings were based on the current available data.
D&L said it is gearing up for the launching of a full range of shelf-ready products for its export customers, made from coconut oil, for the personal and baby care, cosmetics and beauty care, household cleaning, health and nutrition, and food and vegetable oils categories that are sustainable, natural, and organic.
“This initiative offers a plug-and-play solution for global brand owners who are looking to beef up their sustainable product offerings,” the company said.
“Under this strategy, D&L will primarily target export customers who do not have the proximity to the source and instead would traditionally go through multiple layers of production before their products get into its final form and ready for end-customer purchase or consumption,” D&L Industries added.
