D&L’s new plant located in Batangas —CONTRIBUTED PHOTO
The Batangas manufacturing plant of D&L Industries Inc. turned profitable in the second quarter for the first time since starting operations, thus lifting the first-half earnings of the listed food ingredients and plastic manufacturer.
The Lao family-led company on Tuesday said its six-month net income inched up by 6 percent to P1.3 billion.
This represents 56.5 percent of the company’s P2.3-billion full-year earnings in 2023. D&L earlier said it wanted to grow profits this year by 10 percent.
READ: D&L income up after trimming Batangas plant losses
“As we further ramp up operations and onboard new customers, we see gradually increasing earnings contribution from this new plant over time,” D&L president and CEO Alvin Lao said in a stock exchange filing.
According to the company, the Batangas plant booked a net profit of P149 million in the second quarter, coming from a net loss of P16 million in the first quarter of the year.
This beats D&L’s initial profitability target for the plant. Based on the performance of its older plants, these usually turn profitable after two years of operations.
The P10-billion facility was opened in July last year to help boost D&L’s export business by catering to more global clients in need of coconut-based products for food, as well as oleochemicals.
“To date, the new plant has successfully fulfilled several orders for both local and export customers,” D&L said in its disclosure.
Exports accounted for a record 33 percent, or P6.2 billion, of the company’s P18.98-billion total revenues during the period.
This was driven by both existing and new export customers, according to D&L, as it aims to have at least 50 percent of export sales accounting for total revenues.
The company also noted that high margin specialty products remained its key earnings driver, as volumes went up by 33 percent in the second quarter alone.
Growth was spurred by additional capacity from the Batangas plant, D&L said.