D&L Industries on track with 2013 income target

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After registering a significant increase in its first-half income, listed D&L Industries said that it is on track in hitting its full-year income target, which was pegged at more than P1 billion.

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Alvin Lao, D&L Industries executive vice president and chief financial officer, said in a media briefing that given the income growth it registered in the first half of the year, the company is poised to register a record profit.

“In the previous briefing, you will see that we forecast to hit P1.83 billion in 2013. With our income for the first half at P655 million, we are already at 64 percent of full-year 2012 earnings,” Lao said.

“We expect more businesses to come in. We are confident of hitting that guidance,” he added.

The net income of D&L Industries reached P655 million, or an earnings per share (EPS) of P0.18, for the first half of 2013, 16 percent higher than the same period last year. In 2012, the company’s first-half profit was at P564.5 million.

However, the company’s revenues were 17 percent lower at P4.9 billion, reflecting lower commodity prices, in particular palm oil, that it later on passed on to customers.

“We are progressing further toward expanding our high-margin specialty businesses. As a result, gross profit margin grew from 15 percent last year to 18.7 percent, while net income margin rose from 9.5 percent to 13.3 percent,” Lao explained.

The company’s food ingredients business, Oleo-Fats Inc. (OFI), also delivered good growth in margins and volume, consistent with the underlying domestic consumer trends.

Exports, now 4 percent of OFI’s total sales, also continued to strengthen during the period, backed by robust volume growth and higher margins, while its sales overseas surged 66 percent year-on-year.

Revenues, however, were also lower by 17 percent at P3.5 billion as the firm continued to face headwinds of weak palm oil prices.

OFI closed the first six months of the year with a net income of P263 million, 23 percent higher than the P213 million recorded during the same period last year.

In its plastic business, sales were down 10 percent to P1.2 billion.

First in Colours and D&L Polymers and Colours, meanwhile, delivered healthy earnings growth of 9 percent year-on-year at P240 million.

Chemrez Technologies, another subsidiary of D&L, on the other hand, grew its revenues by 11 percent year-on-year to P2.1 billion in the first half of the year.

This, according to the firm, was driven mainly by biodiesel, a third of Chemrez’s total revenues, with a sales increase of 33 percent as volume grew by 2.5 times.

Meanwhile, Aero-Pack Inc. sustained impressive topline and bottomline growth after it sales went up 21 percent to P198 million, and net income increased 26 percent year-on-year to P33 million.

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