MANILA – D&L Industries, a manufacturer of specialty food ingredients, plastics and oleochemicals, is optimistic about booking higher earnings in the fourth quarter and in 2021 especially with the Joe Biden presidency that is expected to boost its exports business.
In a virtual press briefing Monday, D&L president and chief executive officer Alvin Lao said earnings in the September to December period are expected to “be better” than the third quarter despite having not a normal Christmas due to the ongoing pandemic.
The company doubled its net income to PHP573 million in the third quarter from PHP287 million the previous quarter with the gradual reopening of the economy, allowing it to capitalize on relevant product offerings.
Lao said the company hopes to exceed PHP1-billion earnings in the second semester of the year.
“There is a good chance that an increase in fourth quarter for food will offset possible lower fourth quarter net income from the non-food brought about by the Christmas shutdowns,” he said, citing the declining trend for non-food manufacturing towards the Christmas season.
“I think the food industry in general, there is still a strong correlation with the economy, how it is doing. So if construction is doing well, (and) with businesses are doing well, then people have more money, they want to spend it on things like food. So I guess I’m optimistic but I can’t say for sure,” he added.
Lao further said better earnings may be sustained next year especially with the Biden presidency.
He said President-elect Biden will probably be more willing to negotiate and discuss things, indicating less risks from further trade wars.
“So we might see more trade so that will be a positive for our export business. Biden is also seen as more a believer in science and global warming, climate change, so pushing sustainability and renewables more...,” he added. “(This will) likely be positive for things like our biodegradable plastics as well as our specialty oleochemicals.”
Lao also believed that the current awareness on health, safety, and sanitation which benefited certain business segments will remain beyond the pandemic.
“So meaning, even the pandemic ends, most likely, the emphasis on health and safety and wellness will likely remain so the performance of our exports (business) will likely be okay,” he said.
Export sales continued its positive momentum in the third quarter as it jumped 58 percent year-on-year, bringing nine-month growth to 37 percent.
Export contribution to total revenues in the third quarter posted again another record high of 32 percent. This brings January to September export contribution to 28 percent compared to just 20 percent over the same period last year. (PNA)
