D&L Industries Inc. remains optimistic that it would post better financial results in the coming months after its earnings plunged by double digits in the first three quarters of 2019.
In a briefing in Makati City on Tuesday, D&L said its net income dropped by 15 percent to P2.03 billion in the January-to-September period from P2.4 billion year-on-year.
For the third quarter alone, its net profit fell by 29 percent to P617 million from P874 million a year ago.
Sales in the first three quarters slipped by 18 percent to P16.56 billion from the year-earlier P20.17 billion.
D&L blamed the nine-month results on the weak performance of its non-food businesses — subsidiary Chemrez and specialty plastics — on the back of uncertainties arising from the trade war between the United States and China and the decline of the automotive industry worldwide.
“The big factor you see across the divisions is government underspending, primarily because of [budget delays],” D&L President Alvin Lao said.
These weighed on the firm’s total volume for the period, dipping by 10 percent year-on-year. High-margin specialty products and commodities slid by 3 percent and 18 percent, respectively, in the first nine months.
Total gross profit from its food ingredients segment dropped by 2 percent in the January-to-September period on account of lower foreign-exchange gains and higher interest expense.
Earnings from oleochemicals and other specialty chemicals declined by 16 percent, while those from specialty plastics dipped by 18 percent.
Its aerosols unit also saw its income in the period slid by 2 percent year-on-year.
Despite the earnings decrease, Lao remains upbeat for next year, saying the “worst is over” and “things should get better” moving forward.
According to him, the third-quarter results, while still lower year-on-year, were better than the second quarter’s. July-to-September sales grew by 7 percent to P5.52 billion from P5.16 billion in April to June.
The D&L chief also said easing inflation — which reached 0.8 percent last month — could also boost its topline figures in the coming months.
For 2020, Lao said the firm’s revenues might grow by double digits, given that trade-war concerns would be addressed, and its plastics segment becomes stable.
D&L shares dropped by 23 centavos or 2.71 percent to finish at P8.26 each on Tuesday.