Chemical manufacturer D&L Industries Inc. on Wednesday said its income went up by 10 percent to P681 million in the first quarter from the previous year’s P618 million, as its Batangas plant ramped up exports.
Sales grew at a much faster pace at 62 percent to P14.26 billion from the previous year’s P8.83 billion, mainly as a result of higher prices of commodities.
Total volume for the quarter was up 33 percent year-on-year, although the rapid increase in commodity prices tempered potential boost to earnings. Export sales surged by 69 percent and its contribution to total sales hit a record level of 34 percent, the company said.
“The year started with strong momentum. However, the increasing global uncertainties have led to a noticeable slowdown and dampening of global business sentiment,” D&L President and CEO Alvin Lao said.
“Nonetheless, the Philippines may be one of the least affected countries given its import-heavy trade balance. In addition, the lower proposed reciprocal tariff for the Philippines versus its neighboring countries may put the Philippines in an advantageous position.”
Lao also said market volatility is likely to persist in the near-term.
“We remain unfazed and continue to focus on building resiliency and long-term growth strategies. We believe that with our product portfolio, the majority of which cater to basic and essential industries, we will continue to grow and be relevant in an ever-changing business environment and world trade order.”
The company said volume for its high-margin specialty products was up 36 percent, while commodities were up 30 percent.
It said revenues were higher due to the unprecedented increase in commodity prices. Coconut oil, which is one of the key raw materials of the company, saw its average price jump by 74 percent for the quarter and 37 percent year-to-date.
The substantial increase in coconut oil prices was largely due to increasing global demand at a time when supply is temporarily constrained due to the negative effects of El Niño last year on coconut tree yield.
The seasonal harvesting period from May to July may bring relief on the tight supply-demand situation leading to softening of prices.
The company said it expects its margins to recover once commodity prices start to stabilize.