LISTED food and plastics input manufacturer D&L Industries, Inc. reported a 15 percent increase in recurring net income in the first quarter of the year to P633 million on the back of strong domestic demand and accelerated export sales.
It said total revenues rose 35 percent to P6.3 billion, and export sales surged 73 percent, hitting a record high contribution to total sales at 24 percent compared to last year’s 18 percent.
“Starting at the end of 2016, food exports picked up through the company’s partnership with Ventura Foods, following roughly two years of certification and audits. The food ingredients segment is now the biggest contributor to exports, with its export sales more than quadrupling this quarter,” D&L said in a statement on Tuesday.
“This segment contributed 44 percent to total export sales compared with 19 percent in full year 2016,” it added.
It said gross margins continued to improve for the high margin specialty products (HMSP), expanding by 26 percent. The robust growth in low margin commodity revenues, however, dragged down the group-wide gross profit margin for the quarter by 17 percent.
Overall, D&L said net income margin compressed by 11 percent.
The company’s balance sheet remained robust, with net gearing at a modest 15 percent and comfortable interest cover at 25 times. As of end-March 2017, net debt stood at P2.2 billion.
“Our company continues to see growth across all segments,” President and Chief Executive Officer Alvin Lao said.
Food ingredients segment revenues were higher by 56 percent at P3.6 billion, fuelled by the strong growth in refined vegetable oils (commodity) and specialty fats and oils revenues.
Its oleochemicals group posted revenue growth of 17 percent to P1.9 billion.
Specialty plastics revenues grew 5 percent to P683 million mainly on higher average selling price given higher raw material prices.
The aerosols group posted the highest net income growth for the period at 73 percent, driven by 27 percent volume growth and margin expansion.
“The company expects the segment’s strong growth momentum to continue as aerosol penetration in the Philippines remains low. Moreover, the segment should benefit from the increasing consumer demand across all categories, due to rising levels of disposable income in the country,” D&L said.