Egg shells lay P2.64-B profit for chemical firm

Listed chemical firm D&L Indus­tries reported P2.64 billion in net income for 2016 and earnings per share of P0.37 which were both higher by 15 percent.

The income jump was boosted by its development of a key material used in the toy sen­sation Hatchimals.

The specially developed material is used in its egg­shell-like casing, which is strong enough to withstand shipping and handling but also fragile and breakable enough to allow the toy to hatch open over time.

Earnings before interest and taxes (EBITDA) improved 15 per­cent at P3.34 billion.

Revenues stood at P22 bil­lion or 14 percent higher year-on-year with the contributions of the high margin specialties and the commodities at 61 percent and 39 percent respectively.

Group-wide gross profit margin recorded at 18 percent with the high margin specialties improved to 24.8 percent and the Commodities slowed down to 6.6 percent.

Overall, net income margin was stable at 12 percent, the company said.

Return on equity was at 18.8 percent and return on capi­tal at 19.9 percent.

D&L expects growth across all its business segments to con­tinue noting that the government remains optimistic on its targets of a gross domestic product (GDP) growth of from 6.5 per­cent to 7.5 percent in 2017.

D&L Food Ingredients group, in 2016, entered into an exclusive distribution agreement with Bunge Ltd that positioned the company into competitive­ness within the growing premium oils segment in the Philippines and elsewhere in the region.

In 2016, the company also commenced its partnership contract with Ventura, which was signed in 2014. After two years of certification and audits, D&L started exporting and sell­ing specialty oils and food ingre­dients to Ventura last year.

For the full year 2016, D&L posted a 13 percent increase in net income, derived mainly from strong domestic business and from foreign principals such as Ventura and Bunge.

The company remains con­fident on the growth prospects of this segment. Oleochemicals and other specialty chemicals posted a 5 percent net income growth for the period. Special­ty plastics posted a net income growth of 20 percent.

Wire harness-related ex­ports posted strong results as port congestion-affected busi­nesses started to recover. Over the medium-term, Specialty Plastics growth will be supple­mented by tapping into new op­portunities within the toy indus­try.

The Aero-Pack group posted the highest net income growth for the period at 44 per­cent.

Personal Care is the fast­est growing segment posting a 32 percent increase in revenues and 42 percent increase in vol­ume.

D&L Industries has princi­pal activities in manufacturing of customized food ingredients, specialty raw materials for plas­tics, and oleochemicals for per­sonal and home care use.