Chemicals manufacturer D and L Industries Inc. reported low earnings in the first quarter this year of only P594 million, down 24 percent from last year’s P780 million as customers drew from inventories instead.
DNL president and CEO Alvin D. Lao said profits fell in January and February as supply chain issues prompted customers to front-load or stock up on inventories last year but continuing to draw from these in the first two months this year. In March, however, D & L reported a recovery, he said.
“While the first two months were weaker-than-expected, we anticipate things to be much better moving forward as we started seeing volumes coming back in March,” Lao said.
According to him, the momentum is back as global supply chains normalize and customers finally used up excess inventories.
March sales were up 62 percent and 26 percent compared to earnings in January and February last year, respectively.
“This year, our company is celebrating its 60th anniversary and we are confident the resilience and the ability to adapt to changing business landscape built over the years will allow us to continue to thrive despite various macroeconomic challenges,” Lao said.
The enterprise looks forward to starting commercial operations at its Batangas plant, which could happen in the third quarter this year.
“The plant will add capabilities that will allow us to increase our relevance in the overall production chain and service new and bigger customers globally,” Lao said.
Sales in 1Q fell 16 percent to P8.41 billion from last year’s P9.99 billion.
The company reported its sales mix reverting to pre-pandemic level.
Capital expenditures this year is seen falling to P1.6 billion from P3.5 billion in 2022 as its Batangas plant nears completion.
Lao said the year’s capex will complete the Batangas plant and support the maintenance of its other production lines.
In the new normal, the company made significant in-roads in supplying raw materials and even finished products in several relevant fast-moving consumer goods categories.
It plans to further expand its global footprint and in the long-term targets export sales to equal least 50 percent of total revenue.
DNL looks to launch a full range of shelf-ready products for its export customers made from coconut oil for its personal and baby care line, cosmetics and beauty care, household cleaning, health and nutrition, and food and vegetable oil categories that are sustainable, natural, and organic.
