D&L bullish on 2025 prospects amid lower inflation
Expectations of better macroeconomic conditions this year will help boost the earnings of listed D&L Industries Inc., with consumer demand likely to recover.
D&L president and CEO Alvin Lao told reporters during a press chat last week that inflation was “coming down by a lot.”
“It’s making us more optimistic that this year, with inflation much lower, essentially, costs will be much lower,” Lao said.
“There’s more breathing room now for consumers, so hopefully it means more money to spend … if the economy is doing well, then it should have a positive impact on our company,” he added.
The National Economic and Development Authority earlier said the Marcos administration was “optimistic” about curbing inflation and keeping it within the government’s target range.
The Lao family-led food ingredients and oleochemicals producer reported flat earnings at P1.8 billion in the January to September period last year due to higher expenses.
Still, Lao said they expected to surpass their P2.3-billion net income in 2023, as demand was historically better during the last quarter of 2024.
This means that D&L is P520 million away from achieving its target. In the third quarter of 2024 alone, the company booked a net income of P492 million.
Lao noted that they were likewise expecting net income growth this year to be “much better,” especially with mid-term elections coming up.
“Spending in the economy during a year where there’s a presidential election is much higher compared to a midterm election, but there is still an increase,” he said.
At the same time, the national government’s move to increase the biodiesel blend ratio in all diesel fuel sold across the country will help lift earnings through Chemrez Technologies Inc.
Under the Department of Energy’s mandate, the biodiesel blend requirement will be increased to 4 percent by volume by October this year and 6 percent by October 2026.
Chemrez, the chemical manufacturing unit of D&L, began fully operating its coco-biodiesel plant in Quezon City to prepare for a hike in demand.
D&L’s top line in the first nine months of last year reached P29.48 billion, up by 19 percent and driven by robust export sales, whose growth exceeded that of the entire domestic market.
Exports accounted for P9.2 billion in sales, representing a 38-percent uptick on strength in the food segment. Domestic sales, meanwhile, reached P20.3 billion, up by more than a tenth.
