A strong recovery in food ingredients margins and a shift toward higher-margin specialty products lifted D&L Industries Inc.’s net income by 15 percent to P2.2 billion in the first nine months of 2026, helping the manufacturer weather higher financing costs, peso weakness, and geopolitical uncertainty.
Third-quarter net income rose 32 percent year-on-year to P735 million, reflecting improving margins and stronger earnings from its food ingredients business.
D&L President and CEO Alvin Lao said the company’s diversified operations and focus on specialty products helped sustain growth despite persistent external pressures.
Food Ingredients delivered the greatest improvement, with nine-month earnings surging 77 percent year-on-year as margins recovered on more stable coconut oil prices and a more profitable product mix following product rationalization initiatives.
The segment’s margin expanded by 2.7 percentage points, while blended gross margins across the group improved by 1.4 percentage points. High Margin Specialty Products (HMSP) accounted for 51 percent of total sales, signaling a shift away from commodity products toward higher-value offerings.
Gross profit margins for HMSP improved by 2.4 percentage points during the period, supported by more stable coconut oil prices, which hovered around USD2,000 per metric ton, and the company’s ability to pass on input cost adjustments.
D&L’s export business accounted for 23 percent of sales, with HMSP exports growing 14 percent. The company said overseas sales, supported by its Batangas manufacturing facility, also provide a natural hedge against foreign exchange exposure from imported raw materials.
Chemrez, meanwhile, posted a 27-percent decline in earnings following a strong 2025, when profits nearly doubled. Softer biodiesel demand, scheduled plant maintenance, elevated fuel prices and geopolitical tensions weighed on sales.
The company generated P1.9 billion in positive free cash flow for the nine months, benefiting from lower working capital requirements as coconut oil prices normalized and more subdued capital spending.
Improved cash generation enabled D&L to redeem its P2-billion Series B bonds upon maturity on Sept. 14, reducing exposure to higher interest rates.
Its debt-to-EBITDA ratio improved to 4.0 times from 4.3 times at the end of 2025, while interest coverage strengthened to 3.6 times from 3.2 times.
Return on equity rose to 12.7 percent, while return on invested capital reached 9.8 percent, reflecting improving profitability and capital efficiency.
