LISTED industrial firm D&L Industries Inc. reported a recurring income of P1.81 billion, just 1 percent higher than last year’s P1.79 billion, as incremental expenses from its newly commissioned lines at its Batangas plant weighed on its third-quarter earnings.
Net income for the third quarter fell 11 percent year on year to P493 million from P552 million.
“What we are seeing now is the natural cycle of operating a new plant. As we further ramp-up operations, [the] cost base will increase but this should be offset by the new business that we expect to come in,” D&L President and Chief Executive Officer Alvin Lao said.
“Strong export sales continue to drive overall business amid the generally cautious consumer sentiment in the domestic market,” he added.
Exports outpaced domestic performance in the nine months, with total sales up 38 percent year on year to P9.2 billion, gross profits higher by 24 percent at P1.6 billion and gross profit margin (GPM) up by 1.4 percentage points versus domestic sales.
GPM for the export business was at 17.1 percent and 15.7 percent for domestic sales.
“At current export growth levels, we believe we are still barely scratching the surface,” Lao said, adding they expect continued growth in exports amid a sustained focus on higher value-added products where D&L has a competitive export advantage.
The operating companies behind D&L’s Batangas plant, Natura Aeropack Corp. and D&L Premium Foods Corp., have been actively promoting their high value-added coconut oil-derived ingredients and finished products for the food, personal hygiene and home care segments in the export market.
D&L’s four principal business lines are food ingredients; colorants and plastics additives; oleochemicals, resins and powder coatings; and consumer products.
As of end-September this year, D&L’s total capital expenditure stood at P797 million.
On Wednesday, the company’s shares were down 0.79 percent at P6.30 each.
