D&L Industries Inc., the country’s largest customized food ingredients and oleochemicals firm, reduced its 2017 net income growth target to single-digit level from an initial projection of a double-digit expansion on slow infrastructure spending.
“We are guiding lower partly because we have always been conservative as a company. But we are also seeing reasons why the growth might slow,” D&L president Alvin Lao told reporters in a press briefing Tuesday.
While the administration had exerted efforts to improve infrastructure in the country, project implementation is slow.
D&L posted marginal growth in earnings in the second quarter to P688 million because of exceptionally strong earnings in the same last year as a result of election-related spending.
First-half earnings stood at P1.35 billion, up 7.5 percent, on higher export sales.
Revenues in the first six months of the year climbed 24 percent to P12.7 billion as exports surged 64 percent to P2.9 billion on the strong performance of the food ingredients business.
With the company’s partnerships with Ventura and Bunge maintaining pace, Lao said the food ingredients segment was now the biggest contributor to exports, accounting for 42 percent of total sales compared with just 19 percent in the full of 2016.
Lao said the company was keeping a plan build a new manufacturing facility to expand its capacity despite a conservative net income target for the year.
“All our plants are running at 70 percent capacity and it will only be a matter on time when we will hit full capacity. So we still need to expand,” Lao said.
D&L is primarily engaged in product customization and specialization for the food, plastics, and aerosol industries.
Established in 1963, D&L has the largest market share in each of the industries it serves, as well as longstanding customer relationships with the Philippines’ leading consumer and chemical companies.