D&L Industries, Inc. has maintained the growth of its export business, which the head of the listed maker of coconut-based products aims to account for half of total sales in the long run.
“The company’s export business continues to show resilient growth amidst adversities in the domestic market,” D&L Industries President and CEO Alvin D. Lao told stockholders on Friday.
In the second quarter, the company’s export sales expanded by 41% year-on-year, helping raise its first-semester export sales by 25%. The segment’s share in its total revenues stood at a “record high” of 31% in the quarter and 26% in the first-half period.
Coconut-based products mainly contributed to the growth of its export business as these continue to gain traction in the global market due to its perceived natural antiviral, antibacterial, and antifungal properties.
“Our long-term target is for export sales to account for 50% of our total sales,” Mr. Lao said.
D&L Industries, which manufactures products ranging from food ingredients to chemicals and raw materials for plastics, is geared to open its Batangas plant by end-2021. The facility comes as an aid to its growing export business in the food and oleochemicals segments.
“This will be instrumental in our future growth as we plan to develop more high value-added coconut-based products and penetrate new international markets,” the company’s chief said.
Meanwhile, D&L Industries announced it will be releasing about P1.3 billion in cash dividends to its shareholders.
During the company’s virtual annual stockholders meeting, it declared a regular cash dividend of P0.183 per share to be paid starting on Oct. 28.
Its 2020 dividend represents a 3.3% yield, based on its closing price of P5.59 on Thursday.
“Despite the currently challenging environment due to the pandemic, management remains highly committed to its dividend policy of a 50% payout ratio based on the previous year’s net income,” the company said in a separate statement.
Year-to-date, D&L Industries posted a 43% drop in net income to P802 million with net sales falling by 8% to P10.17 billion.
Restaurant closures since March led to the decline in the income share of its primary food business, dropping by 60% over a year ago. Other segments, such as oleochemicals and specialty plastics, recorded decreases in contribution by 35% and 37%, respectively.
Only its aerosols business showed growth with net profit increasing by 20% on rising demand for disinfectants due to virus concerns.
“[M]anagement is confident that the company’s operations will continue to be profitable even in a protracted economic recovery scenario given its robust balance sheet and operational resilience, with net gearing at only 8%,” it said.
On Friday, shares in D&L Industries dropped by 1.61% to close at P5.50 each. — Adam J. Ang