MANILA – D&L Industries, a manufacturer of specialty food ingredients, plastics and oleochemicals, expects to recover its profit in the second half of 2020 after its net income declined by 43 percent in the first half, reflecting economic disruptions caused by the coronavirus disease 2019 (Covid-19) pandemic.
“We are expecting the second half to be much better than the first half. If the first-half net income is a little over PHP800 million, the second half should be at least PHP900 million to PHP1 billion net income. We expect better business across-the-board for all our business,” company president and chief executive officer Alvin Lao said in a virtual press briefing Wednesday.
Lao said they remain optimistic the imposition of modified enhanced community quarantine (MECQ) does not last long, and the take-out and delivery business volume will increase.
“We continue to sense that things are getting better each month as more and more of our customers are able to ramp up operations under the new normal. A possible monkey wrench, however, is a second wave that can return us to a stricter quarantine,” he added.
D&L Industries reported its recurring income reached PHP802 million in the first six months of 2020 from PHP1.4 billion during the same period last year.
In the second quarter alone, its net income fell by 57 percent to PHP287 million from PHP665 million
Lao said weak earnings in the second quarter did not come as a surprise as the months of April and May were placed under strict lockdown measures.
The enhanced community quarantine was implemented in Luzon from March 17 to May 15, while it was extended until the end of May for the National Capital Region.
While the domestic business has faced adversities on various fronts, the company said its export business continues to show resilient growth.
In the second quarter alone, export sales grew by 41 percent year-on-year, bringing first-half growth to 25 percent. Export contribution to total revenues in the April to June period posted a record high of 31 percent.
D&L Industries said coconut-based products under food and oleochemicals were the main drivers behind the robust export growth, as coconut oil continues to gain traction in the global market due to its perceived natural antiviral, antibacterial and anti-fungal properties.
“What we have seen is the emphasis on health, safety, and cleanliness. That continues to give good results for our MCT (medium chain triglycerides) products,” Lao added.
For the first half of the year, the company saw its sales mix tilt towards commodities as demand focused on basic raw materials.
Commodity sales accounted for 37 percent of total revenues, compared to just 31 percent in full-year 2019. The remaining 63 percent of revenues were accounted for by the high margin specialty products (HMSP) segment. (PNA)
