D&L Industries stockholders hit jackpot with 100% stock, P536M cash dividends

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Equity holders of listed raw food materials manufacturer D&L Industries Inc. are set to enjoy big gains this year with the approval of a 100 percent stock dividend and an additional cash dividend of P0.15 per share.

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D&L said in a statement that its shareholders approved on Monday the increase in the company’s authorized capital stock—to P18 billion from P4 billion—which will be the source of its massive stock and cash dividend play this year.

The P18 billion authorized capital amounts to 18 billion shares with a par value of P1 per share.

Because of the increase in capital stock, a 100-percent stock dividend was declared on Monday—totaling 3.571 billion shares—which will be issued out of the increase in authorized capital stock.

“The increase in capitalization ensures the company’s financial flexibility in the future. Further, implementing this through stock dividends instead of equity sales avoids shareholder dilution,” the statement read.

In addition to the stock dividends, shareholders will also be paid a regular cash dividend of P0.15 per share amounting to P536 million.

The record date for the dividend is on June 30, payable by July 8.

Under the company’s dividend policy, D&L is committed to return 25 percent of the prior year’s net income to shareholders via dividends, with an option to declare special dividends.

Last year, a total of P714 million worth of dividends—which is 51 percent of 2013’s net income—was returned to stockholders through both regular and special cash dividends.

This year’s dividend payment, excluding the special dividend of 100 percent stock, will bring the total cash returned to shareholders to P1.79 billion since the company listed on December 12, 2012.

Meanwhile, shareholders also approved on Monday the sale of Chemrez Technologies’ 6,000-square meter property in Quezon City, which consist of land with building and other improvements.

The sale of the Quezon City property was in line with D&L’s bid to unload all its non-core assets to be able to focus on its core businesses.

“With property ownership a non-core activity, the sale is consistent with the company’s focus of deploying resources of the manufacturing group to core operations,” the statement read.

The lot and the building, where Chemrez earlier had its operations, was sold to D&L affiliate LBL Prime Properties for a total of P335.43 million.

D&L saw its pro-forma net income improved in the first quarter by 16 percent to P512 million from P441 million, as its pro-forma revenues likewise increased by 15 percent to P4.83 billion from P4.19 billion.

Earlier, D&L Chief Financial Officer Alvin Lao said the company is “on track” with the consensus net income forecast from analysts of P2.4 billion given the encouraging performance of its business segments.

Lao also said capital expenditures for 2015 are expected to be “10 to 20 percent above” the actual spending of P284 million in 2014, amounting to about P320 million to P330 million.

He said, however, that revenues are seen to be lower this year on lower prices of raw material commodity products, but said it will not hit D&L as growth is mostly based on volume production.

Established in 1963 and listed in December 2012, D&L has four main businesses: food raw materials (Oleo Fats Inc), plastics (D&L Polymer and Colours Inc. and First in Colours Inc.), aerosols (Aero-Pack Industries Inc.), and chemicals (Chemrez Technologies).

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