By James A. Loyola D&L Industries, the country’s largest specialty foods ingredients, plastics and oleochemicals firm, reported a 13 percent hike in recurring income to P1.53 billion in the first six months of the 2018. In a disclosure to the Philippine Stock Exchange, the firm said earnings before interest and taxes were also higher by 13 percent at P1.95 billion. In the second quarter of 2018 alone, earnings and volume growth continued to accelerate. Net income for the quarter increased by 14 percent year-on-year (y-o-y) to P784 million. Meanwhile, High Margin Specialty Product (HMSP) volume grew 14 percent y-o-y, which is twice the historical average of 7 percent. HMSP revenue contribution was at 63 percent versus 58 percent in full year 2017. The remaining 37 percent of revenues was accounted for by D&L’s commodity business that saw its margins improve significantly in the second quarter of the year. Blended commodity margins expanded further to 9.7 percent, from 6.5 percent last quarter and from just 4 percent in full year 2017. As a result, overall gross profit margin for the company in the first half of 2018 improved by 1 percentage point y-o-y to 18 percent. Exports contributed 21 percent to total revenues in the first half of 2018. Export revenues dropped by 5 percent y-o-y, normalizing from above-average growth last year. Oleochemicals slightly overtook food as the biggest contributor to export revenues with 35 percent contribution. This is primarily due to the strong demand for high margin coconut-derived oleochemicals from developed countries. Meanwhile, food ingredients contributed 33 percent to total export sales. Moving forward, the company continues to work towards its target of having export sales account for 50 percent of total sales. The food ingredients segment posted 2 percent y-o-y net income growth in the second quarter of 2018, a slight improvement from the flat earnings growth in the first quarter. Chemrez delivered 27 percent earnings growth in the first three months of the year. This was largely driven by the strong performance of the Oleochemicals segment which more than offset the weakness in the Other Specialty Chemicals segment. The specialty plastics group grew its net income by 13 percent as engineered polymers volume grew by 9 percent y-o-y while colorants and additives volume grew by 3 percent y-o-y. This brought the overall volume growth for the segment at 7 percent y-o-y. The Aerosols group posted 5 percent y-o-y net income growth for the first six months of the year. Volumes were up 12 percent y-o-y.