D&L Industries Inc. is aiming to reach a market capitalization of $2 billion by 2019 to 2021 as it expects income growth to sustain an upward trajectory over the next couple of years.
D&L Industries’ market capitalization stood at P62.71 billion ($1.34 billion) as of May 3.
D&L Industries chief finance officer Alvin Lao said in a press briefing the group was now targeting the market capitalization after hitting $1 billion in September 2015, or one year ahead of target.
D&L Industries, meanwhile, said net income reached P576 million in the first three months of the year, up 12 percent year-on-year, as the company sustained a favorable mix shift to higher margin specialty products.
First-quarter revenues, however, dropped four percent to P4.63 billion, as the lower business registered a 10-percent decline in volume
“But because it is low margin business, the impact on profits is not a big,” Lao said.
The contribution of high margin specialties to revenues increased to 64 percent from 62 percent in 2015. As a result, overall gross profit margin reached another all time-high of 19.2 percent from 16.9 percent in the previous year.
Lao said earnings were driven by the strong growth in specialties on the back of increasing volume and expanding margins.
As expected, specialty plastics volume led the double-digit growth in food ingredients, aerosols, and oleochemicals, as well as the increase in margins.
Lao said the company was sticking to its 10-percent target for 2016 despite the better-than-expected first-quarter performance.
“With the volatility in the global market and the upcoming elections, we are sticking to the same 10-percent growth in net income,” he said.
The company will pursue new investment opportunities.
“Thoughtfully pursuing opportunities in the high growth, high margin space, as well as entering exciting new markets in specialty ingredients, food safety, and oleochemicals, the company is positioned well for long-term growth. This shift satisfies goals not only of volume and margin growth, but also of continuous value creation,” D&L Industries said.
D&L Industries is a Filipino company engaged in product customization and specialization for the food, chemical, plastics and aerosol industries.
The company’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use.