D&L Q1 earnings boosted by non-food businesses

D&L INDUSTRIES, Inc. reported a 5% increase in first-quarter (Q1) net income to P717 million, driven by margin improvements and stronger domestic demand despite mixed performance across its business segments.

In a media briefing on Wednesday, D&L President and Chief Executive Officer Alvin D. Lao said earnings growth was supported by improved margins and the continued profitability of the company’s Batangas plant, which posted its sixth consecutive profitable quarter.

The company said domestic businesses posted stronger sales and earnings as customers front-loaded purchases of non-food raw materials to build inventory and lock in prices amid supply volatility linked to geopolitical tensions.

“We have higher volume sales for non-food businesses, with double-digit growth in revenues and net income for oleochemicals, specialty plastics, and consumer products,” Mr. Lao said.

Export sales accounted for 24% of revenues, supported by a weaker peso, although export volumes declined due to external disruptions.

Segment performance was mixed during the quarter.

Food ingredients earnings declined 69% due to lower volumes and portfolio adjustments, while Chemrez Technologies posted a 34% increase in earnings on higher exports of coconut-based products.

Specialty plastics earnings rose 22% on volume growth and margin expansion, while the consumer products original design manufacturer (ODM) segment grew 65% as production from the Batangas plant ramped up.

Despite the stronger quarterly results, the company flagged risks from geopolitical tensions, elevated oil prices, inflation, and high interest rates.

“Over the past periods, we have navigated significant volatility — from a sharp surge in coconut oil prices, one of our key raw materials, to the recent oil price shocks arising from geopolitical tensions in the Middle East,” Mr. Lao said.

Shares in D&L rose 0.28% to close at P3.58 apiece on Wednesday. — Alexandria Grace C. Magno