LAO-LED D&L Industries, Inc. expects to exceed its P1-billion target for second half earnings due to the resumption of business activities since lockdown measures eased.
In a media briefing Friday, D&L President and CEO Alvin D. Lao said the company is observing a steady growth momentum that may push its second semester bottomline higher than the P900 million-P1 billion it initially projected.
“[In the] second half, [earnings] should be more than P1 billion. Indications are moving better than what we thought,” he said.
D&L’s net income stood at P802 million in the January-to-June period, down 43% from last year due to business closures when the coronavirus came in March. The ensuing lockdown brought its net sales down 8% to P10.17 billion.
The island of Luzon has been placed under a strict lockdown in mid-March to contain the spread of the coronavirus. The restrictions have started easing over the course of the months, with Metro Manila being put under a relaxed lockdown since June.
More businesses were allowed to reopen after the imposition of the relaxed lockdown, which brought back demand for D&L’s products, Mr. Lao said. D&L is a manufacturer of plastics, food ingredients and specialty chemicals.
“Next quarter, meaning third quarter, we’ll likely be better than second… Primarily because [our income in] the second quarter is really low,” Mr. Lao said.
“When [the strict lockdown] started, I think people were really afraid to go out and to do things… Now, I think people are more willing to open up. If companies don’t open, they’re not going to survive… So, that’s one big difference we notice,” he added.
With an above-P1-billion net income expectation in the July-to-December period, D&L may see its 2020 earnings hit close to P2 billion, against its 2019 earnings of P2.62 billion.
The company is also expecting earnings to continue growing in 2021. “Definitely, next year will be better than this year,” Mr. Lao said.
D&L is currently expanding operations through its 26-hectare plant in Batangas, which is on-track to finish construction by the end of next year. Once operational, this will support the expected rebound in demand for the company’s products.
Shares in D&L at the stock exchange closed nine centavos or 1.61% down to P5.50 each on Friday. — Denise A. Valdez