SPECIALTY foods and plastics firm D&L Industries Inc. on Thursday said its net income grew 27 percent to P2.03 billion for 2014, from the previous year’s P1.6 billion.
Sales surged by 39 percent to P20.52 billion, from 2013’s P14.8 billion. The said figures were computed based on the assumption that it fully owned Chemrez Technologies Inc. for 2013 and 2014. D&L bought the entire Chemrez late last year.
For the fourth quarter alone, net income was up 37 percent to P557 million, as sales surged 51 percent to P6.25 billion.
Alvin Lao, the company’s executive vice president and CFO, said stock analysts’ estimates showed that D&L’s net income may reach P2.5 billion this year, or 23 percent from last year’s figures.
“I think the stock analysts’ consensus estimate is achievable,” Lao said during the company’s briefing.
Revenues, however, will be much lower, as commodity prices have gone down by about 50 percent. “The drop wouldn’t be that much,” Lao said.
He said growth will come on the back of stronger sales volumes from all the company’s product lines in both the domestic and export markets.
“Lower crude-oil price is a tailwind that is expected to favor D&L’s end-markets, in particular food ingredients. With the full ownership of Chemrez, D&L is in a better position than ever to capture these opportunities going into 2015,” Lao said.
Last year high margin specialties drove revenues, accounting for 59 percent of sales. High margin specialties revenues increased 22 percent year-on-year, led by oleochemical specialties and customized specialty food ingredients.
Commodities outgrew high margin specialties resulting in gross profit margin of 15.9 percent versus last year’s 17.2 percent and net income margin of 9.9 percent versus 10.8 percent.
D&L last year acquired the remaining 65 percent of Chemrez Technologies that D&L didn’t own.
In acquiring Chemrez, D&L added 27 percent to top line and 16 percent to net income, reflecting the significant value created by the transaction.
VG Cabuag