Plastic and food input producer D&L Industries grew its recurring first semester net profit by 13 percent year-on-year to P1.53 billion on robust volumes posted by its speciality products and higher margins on its commodity business.
In the second quarter alone, net income rose by 14 percent year-on-year to P784 million.
The high-margin specialty product (HMSP) volume grew by 14 percent year-on-year, twice faster than the historical average. HMSP revenue contribution rose to 63 percent from 58 percent in full-year 2017.
The remaining 37 percent of D&L’s revenue was accounted for by the commodity business. Blended commodity margins expanded to 9.7 percent, up from 6.5 percent in the previous quarter and 4 percent in full-year 2017. As a result, overall gross profit margin in the first semester improved by 1-percentage point year-on-year to 18 percent.
Exports accounted for 21 percent of D&L’s earnings in the first half. Export revenue, however, dropped by 5 percent year-on-year, normalizing from the extraordinary growth seen last year.
Oleochemicals slightly overtook food as the biggest contributor to export revenue with a 35-percent share. Food ingredients contributed 33 percent of total export sales.
The company aims to have export sales account for 50 percent of business.
D&L’s six-month performance translated to a return on equity of 20.4 percent and return on invested capital of 20.9 percent.—DORIS DUMLAO-ABADILLA