D&L Industries, a maker of food ingredients and plastics, said core earnings grew by 41 percent to P1.4 billion last year as margins improved.
The company, which supplies specialty fats and oils mainly to some of the country’s biggest fast food and restaurant chains, noted that revenue dipped by about 1 percent to P10.77 billion due to softening commodity prices.
For the fourth quarter alone, a traditionally strong period for the food business, recurring profit rose by 127 percent to P360 million, D&L said.
The company, which owns a 34-percent stake in Chemrez Technologies and is led by the Lao family, cited an ongoing strategy to shift to higher margin specialty food products.
“The transformation of the business into customized specialties from commodities is still progressing,” it said in its filing.
As of 2013, specialty products accounted for 68 percent of the business against 32 percent for the lower-margin commodities. This compares to a 42-58 percent mix in 2010.
Gross profit margin rose to 18.6 percent from 15.6 percent last year, meaning net margin stood at 13 percent from 9.1 percent, D&L said.
In its filing, the company noted that profit growth was supported across all its business lines, which also include plastics, aerosols and oleochemicals.
D&L said the specialty plastics business slowed by 2 percent, due to a the effects of a supply chain disruption in Bangkok. It noted that margin expansion and cost-management allowed the unit’s profit to rise by 29 percent last year.
D&L cited, for example, a 2013 partnership with Showa Denko for the manufacture of biopolymers.