D&L turns more upbeat as raw material costs ease

By Alexandria Grace C. Magno, Reporter

LISTED specialty food ingredient and oleochemical maker D&L Industries, Inc. said easing crude and coconut oil prices, combined with strong nonfood demand, are improving its outlook as the company navigates uneven consumer conditions and shifting input costs.

“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 Alvin D. Lao told a news briefing on Monday.

Coconut oil prices have dropped to about $2,100 per metric ton from roughly $3,000 per ton in August, Mr. Lao said, adding that prices now are manageable.

Coconut oil accounts for about 39% of the company’s raw material costs. He also cited slower inflation in May as a sign of easing pressure on demand and costs.

Nonfood operations continued to outperform, offsetting a sharp decline in the food segment. Mr. Lao said food-related net income fell 69% last quarter, while nonfood earnings rose significantly, driven by industrial customers in plastics, packaging, construction materials and paints.

Manufacturing clients have been building inventories amid concerns over potential supply disruptions tied to the war in the Middle East, supporting demand for D&L’s industrial products.

Mr. Lao said many of these customers operate on relatively high margins, allowing them to absorb input cost swings without major volume cuts.

The nonfood segment accounts for 46% of total revenues, making it a key growth driver as food demand remains weak.

D&L reported a 5.22% rise in first-quarter net income to P716.69 million from a year earlier, supported by margin gains and stronger domestic demand despite mixed segment performance.

Food ingredients earnings declined 69% due to lower volumes and portfolio adjustments.

Unit Chemrez Technologies posted a 34% increase in earnings on higher exports of coconut-based products. Specialty plastics rose 22% on stronger volumes and improved margins, while the consumer product original design manufacturer segment grew 65% as output from its Batangas facility increased.

During its annual stockholders’ meeting, D&L appointed Cesar G. Romero and Richard Raymond B. Tantoco as independent directors, replacing Lydia Balatbat-Echauz and Corazon de la Paz-Bernardo after completing the nine-year term limit under Securities and Exchange Commission rules.

“Both bring a wealth of experience gained from leading some of the country’s most respected organizations,” Mr. Lao said. “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.”

Mr. Romero previously held senior roles in the Shell Group, including president and chief executive officer at Pilipinas Shell Petroleum Corp., while Mr. Tantoco served as president of Energy Development Corp. and held board positions in several listed energy and aviation companies.

The company declared a total cash dividend of P0.236 per share, consisting of a regular dividend of P0.182 and a special dividend of P0.054. The payout represents 65% of prior-year net income and marks the sixth consecutive year of special dividend declarations since 2020.

D&L shares rose 3.06% to P3.70 each on the Philippine Stock Exchange.