MANILA—Listed food and plastic input manufacturer D&L Industries expects to sustain a 15 to 19-percent growth in net income this year, as it continues to grow its overseas markets while domestic business remains robust on strong domestic economy.
“For 2017, we are expecting that as long as the Philippine economy continues to grow well, net income should be mid to high teens,” D&L President Alvin Lao told reporters.
Lao said the company aimed to grow the share of its export business to half of its total revenue over the next 10 years from the current 19 percent.
“That’s why we are investing a lot to grow our exports, we are doing a lot of contracts with companies like Ventura, Bunge,” he said.
D&L subsidiary Oleo-Fats Inc. forged in 2014 a supply agreement with United States food manufacturer Oleo-Fats Inc. to develop and produce specialty oils and specialty ingredients for the food service, retail and ingredient-manufacturing industries in the Asia-Pacific region.
“We are forming a lot of agreements with foreign principals to help our exports grow,” Lao said, identifying the Asia-Pacific region and Association of Southeast Asian Nations (ASEAN) region as key expansion markets.
Lao further said overseas markets were keeping with the robust growth of its domestic business.
He noted the company posted an average 18-percent growth in net income for the last three years on the back of the country’s growing economy and stable political situation.
“For 2017, we need the economy to continue to do well, the political situation continues to be stable, (and) the sentiment of investors, both foreign and domestic, will still be positive,” Lao said.
“The increase in disposable income we believe is going to positively affect all the products we make in the company. We don’t anticipate any segment to outperform; we think all of our segments will do well,” he added.
D&L Industries’ recurring net income reached Php2.64 billion in 2016, up 15 percent from Php2.3 billion the previous year.
Revenues surged 14 percent to Php22 billion on broad-based increase in sales volume and higher prices of raw materials.
High margin specialties accounted for 61 percent of revenues while the remaining 39 percent was accounted for by commodities.
The Food Ingredients group posted a 13-percent increase in net income on higher volume backed by strong domestic business and as agreements with foreign principals such as Ventura and Bunge Ltd. start to bear fruit.
In 2016, the group entered into an exclusive distribution agreement with publicly listed firm Bunge Ltd., providing the company with a broader range of oil products to offer to the local food service market.
Oleochemicals group and specialty plastics posted 5 percent and 20-percent net income growths, respectively, for the year. These were driven by higher sales volume and improvement in overall gross profit margin.
Meanwhile, the Aero-Pack group posted the highest net income growth for the period at 44 percent.
Within the group, personal care is the fastest growing segment, posting a 32-percent increase in revenues and 42-percent increase in volume.