D&L Industries, the country’s largest specialty foods ingredients, plastics and oleochemicals firm, has declared cash dividends amounting to P1.36 billion as it sustains its growth trajectory despite the reimposition of tighter quarantine measures.
During the firm’s annual stockholders’ meeting, D&L declared a regular cash dividend of P0.141 per share plus a special cash dividend of P0.05 per share to shareholders of record as of June 21, 2021.
This year’s dividend translates to a dividend yield of 2.4 percent based on the stock’s last closing price of P7.94. The P1.36 billion to be paid is equivalent to 68 percent of last year’s net income.
Including this year’s payment, the Company has returned a total of P11.5 billion in cash to shareholders through dividends since the IPO in 2012. The company also paid a 100 percent stock dividend in September 2015.
“Management remains highly committed to its dividend policy of a 50 percent payout ratio based on prior year’s net income. In addition, the company has resumed payment of a special dividend after it was paused last year due to the uncertainty brought about by the COVID-19 pandemic,” D&L said.
It added that, “While challenges brought about by the pandemic remain, management believes that with appropriate adjustments and operational contingencies already in place, D&L is in a far better position to thrive in an adverse environment and a potentially protracted economic recovery period.”
Moreover, as the majority of the products that the company manufactures cater to basic essential industries such as food, oleochemicals, plastics and cleaning chemicals, the company sees continued strong demand ahead.
In an interview after the meeting, D&L President and CEO Alvin D. Lao said indications are that the firm’s impressive growth in the first quarter is being sustained in the second quarter even though stricter quarantine measures were re-imposed in the nation’s capital.
Lao said D&L is banking on its growing food and specialty plastics exports for growth but noted that all the company’s business segments have maintained growth levels set in the previous quarter.
“Compared to pre-pandemic levels, first quarter 2021 income seems to be tracking ahead of 2019 income but still slightly behind 2018 income. Assuming that first quarter 2021 income holds steady in the next couple of quarters, the company is set to at least reach its net income level in 2019,” he said.
For the first three months of the year, the company posted an encouraging recovery with recurring earnings growing 35 percent year-on-year and 9 percent quarter-on-quarter to P695 million.
All of the company’s business segments posted positive YoY growth. The recovery was mainly driven by people and businesses gradually adapting to the new normal.
With more than a year into the pandemic, D&L, as well as many of its customers, has found new ways to continuously operate despite various mobility restrictions.
“This is true, not just for the chemicals segment but also for the food ingredients space wherein many food companies are now better-equipped to service customers on a 100 percent takeout or delivery basis,” the company said.
Meanwhile, D&L shareholders approved the company’s plan to raise up to P5 billion from its maiden bond offering consisting a principal amount of up to P3 billion and an oversubscription option of up to P2 billion.
Lao said the planned Peso-denominated fixed-rate bonds offering will likely have a term of three to five years and may be launched in September this year. Proceeds will help fund D&L’s expansion plants in Batangas which is slated for completion in 2021.