D&L sees faster growth in net earnings this year

MANILA, Philippines — D&L Industries Inc., the country’s leading specialty food ingredients and oleochemicals producer, is upbeat about its prospects in 2025, with the company expecting faster earnings growth compared to last year.

D&L president Alvin Lao said the company’s optimism is driven by easing inflation and interest rates, coupled with higher spending due to the mid-term elections.

According to Lao, the company benefits when the economy is doing well.

He said D&L’s profitability has been challenged in the last two years given the impact of high inflation on consumers spending.

“If you look at how prices went up so much, specially during COVID-19, everything was very expensive. For consumers, their pockets really got hurt,” Lao said.

He added that while spending is higher during the presidential elections, there is always an increase in consumer spending even during mid-term elections which should boost the local economy this year.

“So looking forward, it’s making us more optimistic this year with inflation much lower. There’s more breathing room now for consumers so, hopefully, it means more money to spend and hopefully it also means a better economy,” he said.

For D&L’s full year 2024 performance, Lao earlier expressed optimism a strong fourth quarter would allow the company to surpass its 2023 profit of P2.3 billion.

D&L’s net income reached P1.8 billion from January to September last year.

During the third quarter, however, its earnings declined by 11 percent year-on-year to P493 million due primarily to higher cost base resulting from newly commissioned lines inside its new Batangas plant.

Lao, meanwhile, said demand has been quite strong for the company’s biodiesel business.

He said that they are now operating at a higher capacity because of the increase in the mandated blend from two percent to three percent last October.

“From 40 percent capacity, we assumed we would be up by 20 percent to 60 percent. But what we understand is that many other suppliers of biodiesel may have had issues ramping up their own capacity so we might have gone even above 60 percent to make up for the other manufacturers who could not ramp up their capacity,” Lao said.

Lao expects orders from oil companies to start ramping up in the third quarter or around two months before the implementation of another scheduled increase in blend to four percent by October.