D&L Industries net income down 18% to P2.6B in 2019

Listed chemical manufacturer D&L Industries Inc. booked a lower bottom line in 2019 due to several domestic and external developments that affected its business.

In a press briefing in Makati City, D&L president and CEO Alvin Lao said the company posted a net income of P2.62 billion last year, down 18% from P3.187 billion in 2018.

“The company faced a tough year in 2019, brought on by a confluence of external factors,” Lao said.

He said the delayed passage of the government’s 2019 budget, spillover effect of inflation scare last year, lower infrastructure spending, slowdown of auto industry, and indirect effects of trade war dragged the earnings of D&L’s food ingredients, oleochemicals and specialty chemicals, specialty plastics, and aerosols businesses.

“Nonetheless, we see reasons to be more optimistic this year given early passage of the 2020 government budget and extension of the validity of 2019 budget, expectations of further cuts in interest rates, and abatement of the US-China trade war tensions,” Lao said.

“At the same time, however, we are also cognizant of the fresh risks brought on by the COVID-19 outbreak which may have implications on the global economy that may be hard to quantify at this point. As a company, we continue to focus on initiatives that will allow us to grow the business while building resilience,” he said.

Earnings before interest and taxes was lower by 13% at P3.5 billion.

Revenues stood at P22.386 billion, down 16% from P26.543 billion year-on-year.

“The late passage of the budget this year resulting in lower public infrastructure spending, directly impacted demand for industrial and construction-related chemicals, of which Chemrez is a supplier,” Lao said.

“Additionally, it had an indirect impact on general economic activity and consumption. Meanwhile, the slowdown in the global auto industry has put pressure on the company’s specialty plastics business. About half of specialty plastics’ revenues come from export-oriented raw materials used in wire harnesses for automotive applications,” he said.

Meanwhile, as US-China trade talks produced limited upside, 2019 was predominantly marked by global economic uncertainty, the D&L chief said.

“This resulted in cautious projections and muted demand from customers across various industries regionally and in the Philippines as well,” Lao said. — BM, GMA News