D&L Industries Inc., the country’s top specialty food ingredients and oleochemicals producer, reported a four percent improvement in recurring income to P618 million in the first quarter of 2024 from P594 million in the same period last year as its new Batangas plant is almost breaking even ahead of its 2025 target.
In a media briefing, D&L President and CEO Alvin D. Lao said EBITDA, which excludes the impact of the increase in depreciation and interest expenses due to the new plant, was up 17 percent year-on-year (YoY) in the first quarter of 24 to P1.25 billion, which is indicative of the underlying strength of the core business.
“While it is still early days, the Batangas plant has already shown remarkable progress with respect to the ramp up of its operations as well as in surpassing its initial commitments with PEZA. With the current run rate, it is possible that we may see breakeven sooner-than-expected," remarked D&L President and CEO Alvin Lao.
Meanwhile, Lao said they continue to closely watch macro factors which can potentially dampen business sentiment such as the lingering effects of inflation, depreciating peso, and even the excessive heat that may impact consumer spending patterns.”
“Barring any unforeseen event, we keep our stance and continue to guide for at least double-digit growth in earnings for this year. Over the longer-term, we have a lot of confidence that the investments that we have made over the past years will pave the way for higher and more sustainable profit growth.
“To date, the new plant has been instrumental in opening up new markets for us as we aspire to become a truly global Filipino manufacturing company,” Lao added.
Since the start of its commercial operations (SCO), the Batangas plant has continued a steady and consistent ramp up in operations. In the first quarter of 2024, there was a marked improvement in its operations with the plant almost breaking even.
From a P315 million loss recorded by the plant during the first quarter of commercial operations, losses have narrowed drastically to merely P16 million in the first quarter of 2024. With the current run rate, it is possible that the plant may breakeven ahead of the initial schedule of at least two years since the SCO.
In the first quarter of 2024, Lao said the high margin side of the business has shown promising progress with margins already surpassing pre-pandemic levels.
High margin specialty products (HMSP) margins were up 4.5 ppts for the period mainly driven by better customer demand, improving mix within the various HMSP categories, and relatively less volatile commodity price movements during the quarter.
Meanwhile, the Batangas plant, which is mainly geared towards the development and manufacturing of higher value-added products, has consistently helped spur HMSP volume since the start of its commercial operations.
Total HMSP volume was up 13 percent YoY in the first quarter of 2024 and was up for three quarters in a row since the new plant started operations.
Meanwhile, D&L Industries was conferred the prestigious Gawad Yamang Isip award for Inventions by the Intellectual Property Office of the Philippines (IPOPHL) for successfully commercializing inventions that have benefited the Filipino people and society at large.
The award was specifically for the invention and subsequent patenting of the “composition of medium chain triglycerides containing substantial amount of lauric acid,” which is the key formulation of Laurin® CocoMCT, which is coconut oil in its most concentrated form that contains only the healthiest and most beneficial part.
D&L Industries is the pioneer in manufacturing CocoMCT in the Philippines and is currently among the top suppliers globally. With the commercialization of this product, the company is able to provide a sustainable livelihood to coconut farmers and their communities through the programs of the Lao Foundation with Dualtech Training Center.
Gawad Yamang Isip is the premiere national award for intellectual property (IP) creators and owners whose works helped improve Filipinos’ lives using the IP system. This year’s GYI awards were conferred to individuals and institutions whose innovation have contributed to the fulfilment of the United Nation’s 17 Sustainable Development Goals (SDGs).