D&L Industries, Inc., the country’s largest specialty foods ingredients, plastics and oleochemicals firm, has declared a regular cash dividend worth P1.3 billion or P0.183 per share.
Announced during the firm’s annual stockholders meeting, the cash dividend will be given to shareholders of record as of October 2, 2020. Ex-date is on September 29, 2020 and payment will be made on October 28, 2020.
“Despite the currently challenging environment due to the pandemic, management remains highly committed to its dividend policy of a 50 percent payout ratio based on the previous year’s net income,” D&L said.
The D&L management also expressed confidence that the company’s operations will continue to be profitable even in a protracted economic recovery scenario given its robust balance sheet and operational resilience, with net gearing at only 8 percent.
This year’s dividend translates to a dividend yield of 3.3 percent based on Thursday’s closing price of P5.59 per share. Total amount to be paid to shareholders is P1.3 billion, which is equivalent to 50 percent of last year’s net income.
Including this year’s payment, the company has returned a total of P10.1 billion in cash to shareholders through dividends since the IPO in 2012. The company also paid a 100 percent stock dividend in September 2015.
In 2019, D&L Industries’ recurring net income reached P2.6 billion, or earnings per share (EPS) of P0.367, down 18 percent year-on-year.
The decline in earnings last year was caused by a confluence of external factors which included an inflation scare that started in 2018 that persisted until the first half of 2019, delayed passage of the 2019 national budget, and escalation of the various trade wars, including the one between US and China. These factors combined dampened demand in industries that the company caters to.
In the first two months of 2020, the company saw an improvement in its businesses as the headwinds in 2019 were no longer present (i.e. national budget was passed in the first half of January 2020, inflation was no longer a concern).
However, early gains were erased as things quickly took a turn for the worse, with the government imposing various restrictions on the movement of people and goods in response to the COVID pandemic.
The varying degrees of community quarantine negatively affected company operations.
“Despite the unprecedented disruptions brought by the pandemic, management believes that the company is fundamentally equipped to weather the current crisis, given its strong balance sheet and the essential nature of its various businesses, which should see continued demand even in this challenging environment,” the company said.
D&L remained profitable even during the peak of the lockdown in April when Metro Manila was under 100 percent Enhanced Community Quarantine (ECQ), and did not have any month in the second quarter where net income was negative, for any of its main business categories.
D&L’s monthly profits hit a low in April, but continued to increase month-on-month through the second quarter.