D&L Industries, Inc. is confident of sustaining a double-digit growth rate in 2018 to achieve a net income of P3.2 billion at the end of the year as it continues to expand both domestic and export sales.
At the sidelines of a news conference in Makati City on Tuesday, D&L President Alvin Lao said the company was enjoying strong growth momentum from domestic and export sales, particularly in its high-margin specialty products.
“For this year [I think we will hit more than P3 billion] because we already booked P2.9 billion net income in 2017. If you just add 10 percent, that’s P3.2 billion almost and our target is at least 10 percent growth,” Lao said.
Lao noted that the domestic economy continues to grow while inflation remains low, noting that the company continues to produce more new products and venture into new countries and new markets, particularly in the Southeast Asian region.
D&L is present in Hong Kong, Japan, Indonesia, and China, among others, primarily through engaging with US-based Ventura Foods for the production and distribution of foods in Ventura’s Asian markets.
The company saw its recurring net income rise to P2.9 billion in 2017, higher by 10.6 percent from the P2.63 billion recorded in 2016, backed by strong growth in its export business. In the fourth quarter alone, net income grew 12 percent to P786 million.
Export sales contributed 25 percent to profits from just 18 percent in 2016. Export sales grew 68 percent to P6.8 billion from P4.07 billion in 2016.
Food ingredients remained the biggest contributor to exports with a 45 percent share, followed by oleochemicals and other specialty chemicals with 28 percent, and specialty plastics with 27 percent.
Capital expenditure (Capex) programmed for this year is nearly 13 percent higher at P500 million versus last year’s actual spending of P443 million, and will be financed through a mix internally generated funds and debt.
Lao said the amount will be used to finance the operations of its existing businesses, excluding the needed allotment for the construction of its manufacturing facility within a Philippine Economic Zone Authority (PEZA) zone in Batangas.
“You can safely say there won’t be much [increase]in Capex … because we are not a Capex-intensive business,” Lao said.