D&L tracks 2015 profit target

MANILA, Philippines - D&L Industries is confident it will hit its profit growth forecast of as much as 18 percent this year given sustained margin gains across all segments.

The company posted a net income of P1.61 billion from January to September, up nine percent from the same period last year.

“At the beginning of the year, we’ve set it at mid to high teens…15 percent to 18 percent. We think we can hit at least 15 percent,” D&L executive vice president and CFO Alvin Lao told reporters yesterday.

The P1.61 billion profit includes the one-time costs on taxes and filings related to the increase in the firm’s authorized capital last June.

Recurring net income grew 13 percent to P1.66 billion.

Revenues, however, declined by two percent as weak commodity prices tempered higher volume in food ingredients, oleochemicals and aerosols.

 Lower palm and coconut prices held back refined vegetable oils volume but this was offset by accelerating momentum in specialties, in particular volume and margin of oleochemical specialties and food ingredients.

Aerosols delivered good results, while specialty plastics modestly grew in the third quarter.

Meanwhile, high margin specialties, which accounted for 61 percent of revenues, outgrew commodities.

 “Overall, strong volumes in specialties, improved mix, and continued recovery of specialty plastics are expected to drive earnings growth in the remainder of the year,” D&L said.

D&L made continuous headway in the specialty ingredients and food safety space. Overall margins were up, resulting in a 15 percent increase in net income year on year.

By segment, the oleo-fats (food ingredients) focused on optimizing profitability across categories and delivering strong growth in the high margin, high value businesses.

For specialty oleochemicals, which now account for 19 percent of revenues, D&L is continually exploring new avenues for growth.

Aero-pack maintained good progress during the period, delivering various applications and customized products to meet the needs of local brands and manufacturers.

Moving forward, D&L will continue to introduce new products as it boosts investments in its research and development. These include development in areas of skincare, both in aerosols and non-aerosol format.