D&L net income up 16% at P512M from P441M

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Raw food materials manufacturer D&L Industries Inc. saw its pro-forma net income in the first quarter improve by 16 percent to P512 million from P441 million on the back of double-digit growth in food ingredients, oleochemicals and aerosols.

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In a press briefing, D&L Chief Financial Officer (CFO) Alvin Lao said that the company’s pro-forma revenues grew 15 percent to P4.83 billion from P4.19 billion on the strong performance of most of its businesses. Revenue rose despite the impact of port congestion on its specialty plastics segment, half of which are traditionally exported.

The pro-forma figures stands for D&L’s consolidated full-year performance assuming the acquisition of the Chemrez Technologies Inc. took effect in 2014.

D&L has acquired 99.97 percent of Chemrez after it capped its tender offer in October last year which led to Chemrez being effectively delisted from the stock exchange on January 10.

Revenue contributions from various segments remain almost the same as the food ingredients business cornered more than half of the revenue share, while special plastics and oleochemicals took up about 44 percent share of the total, with aerosols having 6 percent.

In terms of business segments, food ingredients’ sales rose 12 percent year-on-year, specialty plastic revenue was down 14 percent from last year on port congestion concerns, oleochemicals sales advanced 31 percent, while aerosols sales surged 42 percent.

In the same briefing, Lao said the company’s board of directors approved an increase in authorized capital stock to P18 billion from P4 billion previously. The increase in capital, he said, is to position the company for funding requirements in the future.

The D&L CFO said instead of the company conducting a rights offer or preferred share issue for additional capital flows to the company, the firm will resort to the issuance of 100 percent stock dividend to its shareholders, amounting to 3.57 billion shares.

This will prevent stock dilution to its shareholders and will not bring so much cash into the company, Lao said.

Meanwhile, Lao also announced that the company has sold Chemrez Technologies Inc.’s 6,000-square meter property at 66 Industria Street, Bagumbayan, Quezon City in a bid to unload all its non-core assets to be able to focus on its core businesses.

The lot and the building, where Chemrez had its operations, were sold to D&L affiliate LBL Prime Properties for a total of P335.43 million, which is still subject for finalization.

Lao said capex for 2015 is expected to be “10 to 20 percent above” the actual spending of P284 million in 2014, which will amount to about P320 million to P330 million.

The D&L CFO said the company is “on track” for the consensus net income forecast from analysts of P2.4 billion given the encouraging performance of its business segments.

He said, however, that revenue is seen falling this year on lower prices of raw material commodity products, but added it will not affect 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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