D&L nets P2.012B in 2020, down 23%

Listed chemicals manufacturer D&L Industries Inc. saw a double-digit decline in its bottom line in 2020 amid the challenging business environment due to the COVID-19 pandemic.

In a disclosure to the Philippine Stock Exchange on Wednesday, D&L reported that its net income stood at P2.012 billion, down 23% from P2.62 billion posted in 2019.

“[Year] 2020 was a challenging year to say the least. But at the same time, these extraordinary conditions further built our resilience and strengthened our conviction in our long-term strategies. It demonstrated the highly relevant nature of our businesses’ catering to basic industries, and our operational adeptness as even in the worst of times, even at the peak of the lockdown, the company never saw negative net income,” said D&L president and CEO Alvin Lao.

The company’s sales saw a decline of 3% to P21.74 billion from P22.386 billion year-on-year. Gross profit, likewise, declined by 15% to P3.988 billion from P4.674 billion a year earlier.

Nonetheless, D&L saw a recovery in the last quarter of the year as it booked a net income of P637 million, up 8% from P590 million in the same period in 2019.

“In the final quarter of 2020, we managed to surpass pre-COVID performance, with our net income growing 8% year-on-year. This accompanied the gradual opening of the economy and inspires confidence, as it shows that earnings growth is gradually coming back,” Lao said.

For the year 2021, the company is optimistic that its financial results will recover to pre-pandemic levels.

“We believe that the probability of returning back to a large scale ECQ-type lockdown has been reduced substantially with the increase in COVID-19 cases remaining manageable post-Christmas and New Year. This bodes well with the continued recovery in economic and business activities,” Lao said.

“With better visibility on recovery and with the company being in a stronger operational position, there is reason to believe that our 2021 results will likely be better than 2020,” he added.

D&L said its products generally serve basic industries.

“From our past experience, after every crisis, when recovery starts, we usually start seeing good growth in the businesses we are in,” Lao said.

“As a sign of our confidence, we remain committed to our expansion plan in Batangas...,” he added.

D&L said its Batangas facility expansion is currently in full swing construction. The company has so far spent a capital expenditure of P2 billion for the project.

It said the remaining capex to be deployed stands at around P4.5 billion.

The said expansion facility will mainly cater to D&L’s growing export businesses in the food and oleochemicals segments. It will add the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain.

The Batangas plant was originally planned to be completed by the middle of 2021. However, given the delays associated with the community quarantine, operations at the new facility are now expected to start at the end of 2021. — Ted Cordero/RSJ, GMA News