D&L Industries Q1 net income down 31% amid COVID-19

Listed chemicals manufacturer D&L Industries Inc. posted a net income of P515 million in the first quarter of 2020, down 31% from a year earlier due to disruptions on its business brought by the COVID-19 crisis.

During a virtual presser, D&L president and CEO Alvin Lao noted that the income decline year-on-year appears steeper as the first quarter of 2019 was the best quarter recorded last year, when earnings still managed to inch up.

Revenues for the period declined by 3% to P5.7 billion.

“The COVID-19 pandemic has disrupted many aspects of our daily lives and how businesses operate,” Lao said.

“However, just like any other crisis that we’ve gone through in the past, this is also an opportunity for our business to build long-term resilience. We believe that we are fundamentally equipped to weather this storm given our strong balance sheet and the essential nature of the businesses we’re in, which should see continued demand even in this challenging environment,” he said.

The company’s food ingredients segment posted a 34% decline in net income in the period.

While January sales were steady, general market weakness was felt as early as February as people started going out less with the growing fear of local virus transmission, according to Lao.

Furthermore, the implementation of ECQ in Luzon by mid-March resulted in the temporary closure of hotels, restaurants, and caterers which, in turn, resulted in lower demand across the various subsegments of food ingredients, he said.

D&L’s Chemrez group saw its total volume decline by 26% in the first quarter.

This was mainly due to lower volumes for biodiesel and other specialty chemicals, which are chemicals used in various construction and industrial applications that were deemed as non-essential during ECQ, Lao noted.

The company’s specialty plastics business saw its net income decline mainly due to the 8% decline in total volume, as demand for engineered polymers and colorants and additives remained soft.

“This segment continues to feel the effects of the slowdown and supply chain disruption in the global auto industry as about half of its sales come from export-oriented raw materials for automotive wire harness applications,” Lao said.

“Moreover, many of the local plastic molders, who are the main customers for the colorants and additives segment, were not operating during the ECQ,” he added.

The aerosols segment, meanwhile, experienced significant growth in its business as demand for sanitation chemicals such as disinfectant sprays and alcohol saw a notable surge.—AOL, GMA News