D&L Industries the country’s largest specialty food ingredients, plastics and oleochemicals firm, sustained its strong recovery in the second quarter of 2021, setting the stage for the firm to exceed its pre-pandemic earnings in 2019.

In an online press briefing, D&L President Alvin D. Lao said net income jumped 134 percent year-on-year (YoY) to P671 million in the second quarter of the year.

This brings earnings for the first half of the year to P1.4 billion, up 74 percent YoY. All segments posted significant recovery YoY with consolidated income already at pre-COVID level.

“If you annualize the P1.4 billion net income in the first half, you will get P2.8 billion for the full year of 2021 which is higher than the P2.6 billion earning in 2019,” Lao said.

He noted that, “Our strong earnings recovery in the second quarter of 2021 suggests that things are much better compared to last year. It also demonstrates the essential nature and the resiliency of our underlying businesses.”

While Metro Manila has returned to stricter quarantine measures yet again in August, Lao said “we do not expect significant impact on our businesses, similar to what we have observed in the second quarter when Enhanced Community Quarantine (ECQ) and Modified Enhanced Community Quarantine (MECQ) were reimposed.”

“With more than a year into the pandemic, we find ourselves, as well as many of our customers, in a much better position operationally to navigate the current situation with minimal business disruption,” he added.

Lao also note dthat, “We see emerging positive catalysts in the horizon such as the onset of the Christmas season, an additional spending boost coming from the 2022 election campaigns, and progress on the country’s vaccination efforts that can provide upside surprises.”

“Overall, we remain optimistic and excited about the future prospects of our business, especially with our Batangas plant coming online in the next couple of quarters,” he said.

For the first half of the year, the company saw its net income reach pre-pandemic levels with second quarter 2021 earnings 1 percent higher versus the same period in 2019 while first half 2021 earnings are just 1 percent lower than in the same semester of 2019.

In the second quarter of 2021 alone, the High Margin Specialty Products (HMSP) side of the business, posted a 36 percent YoY recovery in volume.

On a quarter-on-quarter basis, despite the reimposition of a new round of ECQ and MECQ from late March to mid-May in Metro Manila and nearby provinces and the Easter holiday in April, HMSP volume was only lower by 3 percent.

Earnings in the second quarter of 2021 were lower by 7 percent compared to the first quarter of 2021 but this was mostly due to higher interest expense for the period due to more debt needed to support its Batangas expansion.

For the first half of the year, all of the company’s business segments posted significant recovery for the period. The continued recovery was mainly driven by people and businesses gradually adapting to the new normal.

Export sales continued its positive momentum in the first half of 2021 as it jumped 70 percent YoY. Export contribution to total revenues in the first half of 2021 stood at 33 percent compared to just 26 percentover the same period last year.

Coconut-based products under food and oleochemicals were the main drivers behind the robust export growth. Coconut oil continues to gain traction in the global market due to its perceived natural antiviral, antibacterial, and antifungal properties.

In addition, coconut-based products are great sustainable substitutes for petroleum-based raw materials used in many applications such as personal hygiene and home cleaning products.

The company sees continued strong coconut oil-based exports, which should offset some of the weakness in the domestic market in the near term.