D&L Industries Inc., the country’s largest producer of oleochemicals, specialty plastics, and food products, is growing more optimistic as the prices of both crude oil and coconut oil have dropped substantially from their peaks while its non-food business continues to enjoy heightened demand.

“It’s hard to predict, but I think the worst is over with a lower price of crude oil,” D&L President and Chief Executive Officer (CEO) Alvin D. Lao said in a media briefing after the firm’s annual stockholders’ meeting (ASM) on Monday, June 8. He also cited the lower-than-expected inflation rate for May as a sign of improvement.

While crude oil prices have dropped from their peak of $120 a barrel to about $95 a barrel, he said coconut oil prices have fallen 30 percent from their peak of $3,000 a ton last August to the current $2,100 a ton. “So, in that sense, we’re comfortable. If we could survive at $3,000 a ton, we’re definitely okay at $2,100 a ton.” Coconut oil accounts for about 39 percent of D&L’s raw materials.

Meanwhile, as sales of D&L’s food products declined due to inflation, Lao said that “thankfully we have our non-food side, which was up by a lot, and that growth more than offset the weakness or drop in the food side.”

He explained that this is primarily because many of their customers engaged in the manufacturing of plastics, packaging, and construction materials, including paints, are stocking up on more raw materials than usual amid fears of supply disruptions due to the Middle East conflict.

These manufacturers enjoy high margins for their products, so they are able to absorb higher prices without affecting volume. D&L’s non-food revenues account for 46 percent of total revenues.

Lao also noted that while there is a strong shift to electric vehicles (EVs) among new car sales, there is minimal impact on demand for biodiesel since diesel is used mostly by public transportation and trucks, while private vehicles comprise only a small percentage of its market.

Amid current market challenges, he said, “management remains confident in the company’s ability to emerge stronger through each business cycle. At the same time, such disruptions create opportunities to further strengthen the company’s position as a reliable supplier and trusted partner. By delivering customized solutions and dependable support, D&L continues to help customers navigate an increasingly complex and evolving business environment.”

During the shareholders’ meeting, D&L announced a total dividend of ₱0.236 per share consisting of a regular cash dividend of ₱0.182 per share and a special cash dividend of ₱0.054 per share to shareholders of record as of June 23. The ex-date is June 22, while payment will be made on July 8.

The firm remains highly committed to its regular dividend policy of a 50-percent payout ratio based on the prior year’s net income. This is also the sixth consecutive year since the peak of the pandemic in 2020 that D&L has been able to declare special dividends. This year’s special dividend amounts to 15 percent of the prior year’s net income.

In total, this year’s payout ratio remains at 65 percent of the prior year’s net income, consistent with the payout ratio over the past four years. The ₱0.236-per-share dividend this year translates to a 6.6-percent yield based on June 5’s closing price of ₱3.59 a share.

Meanwhile, D&L elected two new independent directors to its board of directors: former Pilipinas Shell Petroleum Corp. president and CEO Cesar G. Romero, and former Energy Development Corp. (EDC) president and CEO Richard Raymond B. Tantoco.

“Both bring a wealth of experience gained from leading some of the country’s most respected organizations and from working across diverse industries and global markets. Their perspectives, strategic insight, and commitment to good governance will further strengthen our board as we continue to pursue sustainable growth and create long-term value for our stakeholders,” Lao said.

Also, because of the term limit, former independent director Mercedita S. Nolledo has been elected as a regular director, together with independent director Karl Kendrick T. Chua.

This means that the Lao family directors—Alvin Lao, Chairman Yin Yong L. Lao, and Vice Chairman John L. Lao—now comprise the minority of the seven-member board.