Food ingredient and specialty plastic additive manufacturer D&L Industries said on Monday that its net income increased by a fourth in the first nine months of the year, on the back of strong performance in all of its four business segments.
In a statement, D&L said that its net income reached P1.04 billion (P0.29 earning per share) in January to September 2013, or 25 percent higher compared to the same period last year. For the third quarter alone, the company’s net income grew by 43 percent year-on-year to P387 million.
“Profit growth was group-wide, with all four business segments reporting year-on-year growth,” D&L said.
“As expected, due to persistent softness in commodity prices, year-to-date consolidated revenues were lower by 9 percent year-on-year. The past two consecutive quarters, however, have seen average sequential topline growth of 9 percent on back of increasing volume and shifting product mix,” it added.
High-margin specialty products (HMSP) accounted for 69 percent of the group’s overall sales for the period, and low-margin commodities accounted for 31 percent. This resulted in overall gross profit margin rising to 18.6 percent from 15.7 percent last year, and overall net income margin improving to 13.6 percent from 9.9 percent.
“Year-to-date, we continue to make substantial, measurable progress on our strategic priority—focusing more on higher margin specialty products—bringing us further on track to meet expectations this year,” the company said.
Overall volume gains accelerated to double digits in the food ingredients segment, underpinned by strong tailwinds in domestic food consumption trends. Improving market dynamics also supported recovery in volume of refined vegetable oils.
“More importantly, volume growth was sustained in specialty fats and oils—a category deemed significant to our strategy,” it said.
“We continue to benefit from tremendous opportunities in the food service market as existing customers add more stores and expand product offerings, and new players emerge. Momentum in exports also picked up as sales increased 82 percent year-on-year, driven by strong volume growth,” it added.
D&L also noted that its Oleo-Fats unit continue to work closely with customers on product development and innovation initiatives, enabling it to penetrate more new food applications and new markets. As a result, the company closed the first nine months of the year with a net income of P420 million, 22 percent up year-on-year. Revenues were lower by 12 percent at P5.5 billion on lower prices of palm oil compared with the same period last year.