D&L expects 19% profit growth

SINGAPORE — D&L Industries Inc., a manufacturer of customized food ingredients and plastics, said it is banking on expectations of another robust economic growth to boost its earnings this year.

Alvin D. Lao, executive vice president and chief financial officer, told reporters the firm is eyeing a 15-to 19-percent growth in net profits this year, slower than the 41-percent increase recorded in 2013.

“We see the economy being strong and since our company benefits from a strong domestic economy, we also see our 2014 performance being strong,” Lao told reporters on the sidelines of Maybank’s Invest ASEAN 2014 Conference here.

The Philippine economy expanded by a faster-than-expected 7.2 percent last year, and this is expected to be sustained this year with the target set at 6.5 to 7.5 percent.

“Our business is mostly in food so because we have a growing population and disposable income is also increasing, that means spending on food is probably going to go up,” Lao said, adding that D&L’s customers include fastfood joints and snack foods companies.

“But our other businesses are also growing — our plastic businesses as well as aerosol products. Even Chemrez (Technologies) is also growing,” he said.

D&L booked P1.4-billion recurring net income last year, up 41 percent from P993 million in 2012.

The growth came from double-digit increase across all business segments, and a rise in the sales of high-margin products.

“Food is one part of the business that we see growing faster than planned or anticipated... Pinoys love to eat,” Lao said.

He noted that the country’s population, with a median age still in early 20s, coupled with the brisk domestic activity has helped grow the business.

At the same time, the firm is looking at sealing partnerships this year to augment its sales.

“We’re constantly talking to a lot of global companies — food, non-oil food ingredients, biodegradable polymer, and even oleochemicals,” Lao said.