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D&L Industries Bares FY21 Results

D&L Industries ended 2021 with a full-year net income of P2.6 billion, slightly ahead of pre-COVID earnings in FY19 and up 31% YoY vs FY20. The recovery was mainly driven by increased economic activity as well as the robust performance of the company’s export business in 2021.


Photo Insert: Despite the pandemic and higher commodity prices, D&L ended 2021 with a full-year net income of P2.6 billion.



Total volume was up by 11% YoY while the company’s export sales grew by 62% YoY. With a lower COVID alert level in place and a continued decline in new cases in the country, the company sees a build-up in momentum and renewed business optimism for further recovery.


“Our business faced incredible challenges during the pandemic. Now emerging two years later on a better footing both operationally and financially, with our earnings already back to pre-COVID levels, we feel that the company has not only proven but also strengthened its resilience,” remarked President and CEO Alvin Lao.

“While we are cautiously optimistic that we are likely at the tail-end of the pandemic, we remain focused on our core competencies, ready to ride another wave of volatility brought about by recent geopolitical uncertainties. While Russia and Ukraine are not a significant part of our supplier or customer base, the ongoing conflict poses a threat to global recovery and has sent prices of key commodities skyrocketing over a short span of time,” Lao added.



“In the near-term, we see demand affected by two opposing forces - continued economic reopening on one hand, and generally higher prices of basic commodities on the other. Nonetheless, while 2022 won’t be without difficulties, we continue to pursue areas of opportunities that will bring the next leg of growth for the company. With coconut oil continuing to gain traction globally as a natural and sustainable substitute to many petroleum-based raw materials, we plan to further capitalize on this by entering more export markets and by using our R&D expertise to introduce more highly specialized coconut-oil-based products. In addition, our Batangas expansion is expected to come online in January 2023 which will be a key milestone in boosting our export sales further,” Lao concluded.


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Despite the pandemic and higher commodity prices, D&L ended 2021 with a full-year net income of P2.6 billion. This is slightly ahead of pre-COVID-19 earnings in FY19 and is up 31% YoY vs FY20 net income. Lower corporate taxes provided by the CREATE law had a 4% impact on FY21 net income.

In the fourth quarter, however, the rapid increase in commodity prices coupled with the tail-end effect of the Delta surge which peaked in September 2021 tempered D&L’s consecutive quarters of earnings growth.


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4Q21 earnings fell 25% YoY to P480 million, as margins dropped 8.7 ppts for the quarter largely due to the lag in price pass through. In addition, there was also a change in product mix in favor of commodities as the country continued to be under a stricter alert level at the beginning of the quarter versus a relatively modest restriction for the entire 4Q20.


As the world gradually recovers from the pandemic, D&L is emerging more resilient than ever, having instituted various adjustments and operational contingencies. While there are renewed risks to global growth and recovery, the company believes that it is now in a far better position to thrive in an adverse environment and a potentially protracted economic recovery period.


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Moreover, as most products that the company manufactures cater to basic essential industries such as food, oleochemicals, plastics, and cleaning chemicals, the company sees continued strong demand ahead.

From a capital structure perspective, the company is in a solid position to withstand external pressures. In September 2021, the company successfully raised P5 billion from 3-year and 5-year fixed-rate bonds, bringing its total net debt to P8.6 billion.


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As of end-December 2021, gearing continues to remain manageable at 45% and interest cover at 27x. In addition, the cash conversion cycle for the period was lower at 120 days vs. 127 days in 2020, given lower account receivables days and higher payable days.

Overall, the company’s profitability ratios remain healthy. Return on Equity (ROE) and Return on Invested Capital (ROIC) stood at 13.8% and 11.9%, respectively, in FY21.



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