D&L Industries exceeds 2013 profit target with strong sales

MANILA, Philippines - D&L Industries Inc., a manufacturer of customized food ingredients, exceeded its profit target last year on the back of strong sales of its high-margin specialized products.

In a regulatory filing, D&L said its recurring net income, which discounts a P296-million gain on the sale of land in 2012, surged 41 percent in 2013 to P1.4 billion from P993 million a year earlier.

“Profit growth was across all businesses, with all four segments reporting double-digit year-on-year growth,” D&L said.

Alvin Lao, executive vice president and chief finance officer of D&L, said the company exceeded its target of growing its income by a third to P1.38 billion.

“The strong broad-based finish of the group in 2013 is a testament to the high-growth nature of the company’s end markets: consumer staples, consumer durable goods and consumer discretionary,” he said.

The firm said its performance was also supported by margin improvement. Last year, high-margin specialty products accounted for 68 percent of sales, with low-margin commodity products taking up the remaining 32 percent.

Sales slipped one percent to P10.76 billion from P10.87 billion due to weak commodity prices.

However, Lao said volume growth indicates that end-markets like snacks and quick-service restaurants, cars and convenience items like body sprays and insecticides are still growing at a fast pace.

Specifically, Chemrez Tech reported a 34-percent climb in volume, followed by the food ingredients segment at 30 percent and aerosols at 27 percent, well enough to offset the two-percent drop in specialty plastics.

Food ingredients supplier Oleo-Fats Inc. recorded a 38-percent boost in its earnings to P569 million.

“The strong growth momentum in specialty fats and oils was another huge driver, further strengthening Oleo-Fats’ position as the dominant player in customized ingredients space in the food industry,” D&L said.

Specialty plastics makers First in Colours and D&L Polymer & Colours Inc. posted a combined income of P540 million, up 29 percent from a year ago.

“By leveraging on its existing relationships locally, the group eyes expanding its footprint throughout other markets,” D&L said, adding that it partnered with Showa Denko for the manufacturing of biopolymers early last year to export products to Japan, Italy and the rest of Europe.

Chemrez Technologies, a producer of oleochemicals, resins and specialty chemicals, said its profits rose 30 percent to P318 million last year.

“The company continues to focus on research and development to grow its higher margin specialty chemicals business. In fact, good progress has been achieved in emerging product categories, in particular the non-biodiesel, specialty oleochemicals,” D&L said.

Lastly, the aerosols business through Aero-Pack recorded a 70-percent surge in income to P88 million last year.