D&L aims to ramp up export revenues
MANILA, Philippines — D&L Industries Inc., a listed food ingredient and plastic manufacturer, expects to generate half of its revenues from exports in the next two to three years with the operation of its Batangas plant.
Alvin Lao, D&L president and CEO, said in a press briefing on Monday they were keen on increasing the revenue share of the exports business to 50 percent from the current 32 percent as the company ramps up production in its new facility.
As of the end of March, food accounted for 51 percent of D&L’s exports. This was followed by oleochemicals and specialty plastics.
The Batangas plant was opened in July last year to produce coconut-based products for food and oleochemicals.
READ: D&L opens P10-B manufacturing plant in Batangas
Lao said the facility’s utilization rate is currently below 50 percent but noted the figure is expected to grow moving forward. He said the plant still has a “lot of extra room to add more manufacturing lines” and boost capacity as a result.
Spending tapering off
Meanwhile, the D&L official said they also have enough cash to extinguish the company’s debts as spending has been tapering off after the completion of the capital-intensive Batangas plant that has a price tag of P10.5 billion.
Long-term debt stood at P3.66 billion as of the end of the first quarter.
READ: D&L Industries sees profits growing by at least 10% in 2024
“As the company moves past peak capex after the completion of its Batangas plant, coupled with the normalization of commodity prices, our free cash flows in the first quarter of the year have already exceeded the full year amount booked in 2023,” he said.
Free cash flows stood at P2.7 billion as of the end of March, more than double the P1.1 billion by the end of 2023.
“As there are no major capex spending planned in the near term, the improvement in the free cash flows gives the company the financial flexibility to further reduce its debt levels over time,” he added.
On Monday, D&L also declared a regular cash dividend of P0.161 per share and a special cash dividend of P0.048 per stock. The company, including this recent declaration, has returned P16.8 billion in cash to shareholders through dividends since making its market debut in 2012.
