LISTED food and plastics input manufacturer D&L Industries Inc. said its recurring net income in 2016 rose 15 percent from the previous year driven by higher sales and growth across its business segments.
D&L said recurring net income improved to P2.64 billion in 2016 from P2.2 billion in 2015, while revenues increased 14 percent to P22 billion on a broad-based increase in sales volume.
High-margin specialty plastics and chemicals accounted for 61 percent of revenues while the remaining 39 percent was accounted for by commodity food ingredients.
“For 2017, we are expecting that as long as the Philippine economy continues to grow well, net income growth should be mid to high teens,” Alvin Lao, D&L president, said in a press briefing on Tuesday.
“Our three-year average growth rate is 18 percent for net income. The economy is doing well, and the political situation is stable. For 2017, we need to see the economy doing well [to achieve our targets],” he added.
Revenue from the export business was up 16 percent at P4.07 billion as various distribution agreements mostly in the Asia-Pacific region materialized.
Lao said it was a challenge to grow the company’s export business faster because of the robust domestic business.
Net income of the food business increased 13 percent as local and international sales jumped by 18 percent thanks to distribution partnership agreements with Ventura Foods and Bunge Ltd.
Income and revenues of the oleochemicals and other specialty chemicals unit were also firmer due to sustained sales and the shift towards higher margin specialty products.
Specialty plastics net income improved by 20 percent while revenues increased slightly by 2 percent. D&L expects this business to grow further in light of the supply agreement for the egg material in bestselling children’s toy Hatchimals.
Net income of the aerosols business increased 44 percent as sales jumped 21 percent.
Lao is confident the company will be able to achieve 15 percent to 19 percent growth earnings growth this year given the robust economy.
The company has programmed around P345 million to P360 million for capital expenditures this year, up from P314 million in 2016.
Established in 1963 and listed in December 2012, D&L is engaged in the development and manufacture of food ingredients; colorants, additives, and engineered polymers for plastics; aerosol products; and oleochemicals, resins and powder coating.