Chemical manufacturer D&L Industries Inc. on Wednesday said its income in January to September surged 57 percent to P2.16 billion from last year’s P1.37 billion, putting the company in a good position to hit its pre-pandemic income.
Sales grew by a third to P21.53 billion from last year’s P15.91 billion.
Alvin Lao, the company’s president and CEO, said its income for the third quarter is now higher than the 2019 level, which points to a recovery in the company’s earnings.
“Our third numbers place us in a good position to achieve full year pre-pandemic income levels, an outstanding achievement given the macroeconomic challenges that continue to weigh on economic recovery globally,” Lao said.
In 2019, D&L’s income reached P2.62 billion.
“While rising raw material prices affected our margins, we don’t see this as a long-term phenomenon given our ability to pass these changes on to customers every four to six weeks,” Lao said.
“Separately, we noticed that year-to-date growth of high margin volumes slowed in the third quarter, as a result of the stricter quarantine measures that were reintroduced in August and persisted until mid-October. While we were able to maintain almost full operations amid these lockdowns, dine-in capacity was severely curtailed,” he said.
For the third quarter alone, its net income grew 34 percent to P768 million from last year’s P573 million. The figure is 25 percent higher than the P617 million registered in 2019.
Revenues, meanwhile, rose 33 percent to P7.62 billion from last year’s P5.74 billion and a 38-percent growth when compared with the P5.51 billion reached in 2019.
Quarter on quarter, the company’s net income grew by 14 percent from the previous quarter, largely due to lower interest expenses and a 492-percent increase in other operating income, mostly attributed to foreign exchange gains.
The company’s exports are mostly denominated in US dollar. The peso depreciation in the third quarter resulted in its exports having a higher peso value, it said.
Its volume of high margin products saw a decline in for the third quarter due to the re-imposition of the strictest quarantine classification in Metro Manila and nearby provinces, which affected the country’s food businesses as dine-in customers were not allowed.
The company said most business segments continued to post significant growth in January to September compared with last year. D&L’s own brand of consumer products saw flat growth for the period as it experienced a high base effect due to the previous year’s surge in demand for hygiene and sanitation products.
The company’s three main business segments, which account for 96 percent of revenues and 90 percent net income, all saw significant growth in net income, it said.
“Going forward, the prospects of our overall business look promising. We look forward to the onset of the Christmas season as we head into the last quarter of the year, as well as public spending ramping up in time for the elections in May next year. Our overseas business stands to benefit from our Batangas expansion coming online next year, which will be a key milestone in boosting our export sales further,” Lao said.