CHEMICAL manufacturer D&L Industries grew its net profit by 9 percent year-on-year to P1.6 billion in the first nine months on higher volume growth in food ingredients, oleochemicals and aerosols.
Excluding one-time costs on taxes and filings related to the increase in the authorized capitalization last June, D&L’s core net profit grew by 13 percent year-on-year to P1.66 billion, equivalent to about 70 percent of the company’s internal full-year goal.
Since the IPO in 2012, D&L has returned a total of P1.79 billion in cash to shareholders through dividends. In addition, a 100 percent stock dividend was paid out in September.
Against the backdrop of improving returns, stronger balance sheet position, and good cash flow generation, D&L chief finance officer Alvin Lao said D&L now wanted to further boost shareholder value by raising the dividend payout policy from 25 percent to 50 percent of previous year’s recurring net income beginning next year.
For the nine-month period, revenues were lower by 2 percent year-on-year to P14.55 billion as overall volume growth was tempered by weak commodity prices.
Lower palm and coconut oil prices held back refined vegetable oils volume. But this was more than offset by accelerating momentum in specialties, in particular volume and margin of oleochemical specialties and food ingredients, the company said.
Aerosols again delivered good results, while specialty plastics modestly grew in the third quarter.
In total, high-margin specialties, which accounted for 61 percent of revenues, outgrew commodities.
The company generated return on equity and return on invested capital of 17.9 percent and 17.4 percent, respectively.
Overall, strong volumes in specialties, improved mix, and continued recovery of specialty plastics are expected to drive earnings growth in the remainder of the year.