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D&L Industries sees 8% income growth to P637M

LISTED manufacturing firm D&L Industries, Inc. saw its fourth-quarter income rise by 8% to P637 million as the Philippines gradually eased its lockdown measures towards end-2020.

“What I want to highlight is really the performance in the fourth quarter. You can see that compared to last year’s fourth quarter, net income was up by 8% and [compared] to the third quarter of 2020, net income was up by 11%. [It] looks like [our] net income has almost fully recovered,” D&L  President and Chief Executive Officer Alvin D. Lao said in an online briefing on Wednesday.

In the fourth quarter of 2019, the company’s net income was at P590 million. In the third quarter of 2020, it earned P573 million.

“That’s the big indicator to us that things look like they really started to get better now,” Mr. Lao said.

Sales for the fourth quarter were nearly flat at P5.82 billion while gross profit slowed by 2.4% to P1.14 billion.

The company reported that its non-food segments have already surpassed their performance before the coronavirus disease 2019 (COVID-19) crisis hit.

Chemrez, Specialty Plastics, and its consumer products ODM (original design manufacturer) accounted for 75% of total fourth-quarter earnings.

The company pointed to the easing of local quarantine restrictions that allowed industries such as transportation and construction to resume their operations as the reason behind the spike in demand for biodiesel and other products related to construction.

D&L’s consumer products ODM, previously called the aerosols segment, also performed well. Year on year, the company saw greater demand for products intended for general sanitation and hygiene such as alcohol, sanitizers, and disinfectant sprays.

The company’s specialty plastic products meanwhile attribute its recovery to the greater market demand for “additives and colorants for plastic packaging applications” amid the sudden increase in parcel deliveries amid the pandemic.

More people have also turned to buying their own cars.

“To a certain extent, the pandemic has increased the public’s interest in purchasing vehicles given the possibility of virus exposure when using public transportation,” the company said.

The company’s food segment meanwhile also reported a 7% recovery in the fourth quarter, as quarantine restrictions eased. Although, D&L noted that the segment’s earnings were still 45% lower year-on-year.

For full-year 2020, D&L’s net income decreased by 23% to P2.01 billion from P2.62 billion in 2019.

Annual sales declined by 3% to P21.74 billion from P22.39 billion, while the company’s gross profit posted dropped 15% to P3.99 billion from P4.67 billion.

Despite the decline, the company is keeping a positive outlook as it closed last year with a positive net cash flow.

“These extraordinary conditions further built our resilience and strengthened our conviction in our long-term strategies. It demonstrated the highly relevant nature of our businesses’ catering to basic industries, and our operational adeptness as even in the worst of times, even at the peak of the lockdown, the company never saw negative net income,” Mr. Lao said in a statement.

He also said the company is aiming to hit the same income levels it earned in 2019.

D&L shares at the stock exchange rose by 4.2% on Wednesday, closing at P7.44 apiece. — Keren Concepcion G. Valmonte

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