D&L declares P1.5-B cash dividend, sees double-digit growth

D&L Industries Inc., the country’s top specialty food ingredients and oleochemicals producer, expects earnings to grow by double-digits this year as it declares P1.49 billion in cash dividends. 

D&L to exceed  earnings guidance
D&L President and CEO Alvin D. Lao

During the firm’s annual stockholders’ meeting, D&L President and CEO Alvin D. Lao said, “barring any unforeseen event, we keep our stance and continue to guide for at least double-digit growth in earnings for this year.” Its new Batangas plant is seen to propel exports to account for half of revenues in two to three years.

“Over the longer-term, we have a lot of confidence that the new investments that we have made over the past years will pave the way for higher and more sustainable profit growth. To date, our Batangas plant has been instrumental in opening up new markets for us as we aspire to become a truly global Filipino manufacturing company,” he added.

Meanwhile, Lao said that “with the help of our Batangas plant, we are on track to reach one of our BHAGs or Big Hairy Audacious Goals which is for exports to eventually account for at least 50 percent of our total sales.”

D&L Batangas.jpg

In the first quarter of 2024, exports recovered sharply with revenues up by 39 percent year-on-year, bringing the export contribution to total sales almost at a record high of 32 percent for the period and this is expected to rise to the mid-to-high 30s by the end of 2024. 

“With the new capabilities and capacity that the Batangas plant brings, D&L reasonably expects that it will be able to achieve its goal of having exports account for at least 50 percent of total revenues in the next couple of years,” said Lao.

During the meeting, D&L Industries declared cash dividends amounting to P1.49 billion consisting of a regular cash dividend of P0.161 per share, plus a special cash dividend of P0.048 per share.

Shareholders of record as of June 19 are entitled to the dividend. Ex-date is on June 18 and payment will be made within 30 days of the dividend declaration or on July 3.

Management remains highly committed to its regular dividend policy of a 50 percent payout ratio based on prior year’s net income. On top of that, for the fourth consecutive year since the peak of the pandemic in 2020, D&L was able to declare special dividends. This year’s special dividends amount to 15 percent of prior year’s net income.

All in all, this year’s payout ratio remains at 65 percent of prior year’s net income, which is at par with the payout ratio in 2022 and 2023. This year’s dividend translates to a 3.3 percent yield based on May 31’s closing price of P6.28 per share.

Including this year’s payment, the company has returned a total of P16.8 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 the first quarter 2024, D&L posted a four percent year-on-year growth in earnings for the quarter to P618 million. This was mainly driven by the steady and consistent ramp up in operations of the Batangas plant. 

There was a marked improvement in the new plant’s operations with it almost breaking even for the first quarter of the year. 

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 Start of Commercial Operations.

As of March 2024, Natura Aeropack Corporation (NAC) and D&L Premium Foods Corp (DLPF), D&L’s wholly-owned subsidiaries operating the Batangas facility, have both surpassed their first year export commitment with PEZA.

Combined, the two subsidiaries have delivered 230 percent of their export commitment to date.