MANILA -- D&L Industries, manufacturer of food ingredients, plastics and oleochemicals, booked a one-percent increase in profit to PHP748 million in the first quarter of the year, on the back of its high-margin business.
“Overtime, because when the economy is growing, you anticipate people are more willing to buy better things and so our high margin products grow faster,” D&L President and Chief Executive Officer Alvin Lao said in a press briefing Monday night.
In terms of sales mix, Lao said high margin specialty products (HMSP) revenue contribution reached a record high of 69 percent in the first quarter of 2019 from the previous 60 to 65 percent.
The commodity segment, accounting for 31 percent of total revenues, continues to see its margins at a favorable level. In January to March, the blended commodity margin stood at 12.7 percent.
Exports as percentage of total revenues stood at 19 percent in first quarter. In peso terms, export revenues declined by 19 percent mainly due to lower commodity prices which were passed on to customers.
“First quarter was weak but what we can see at least are pipelined exports so we are not worried about that. So I think by near the end of the year, we can still recover,” he added.
Lao is optimistic the company is well-positioned to benefit from better growth of the economy given that over 70 percent of its revenue comes from consumer goods manufacturers,
He cited positive economic developments, such as continued easing in inflation amid the oversupply of key food items, anticipated ramp up in government and consumer spending, and government passage of the new budget.
Meanwhile, the food ingredients segment posted record high blended margins for the period, as both HMSP and commodity margins showed improvements.
Chemrez posted a 14-percent year-on-year increase in net income for the period. This was largely driven by the strong performance of the Oleochemicals segment which more than offset the flat performance of the Other Specialty Chemicals segment. (PNA)
