Food and plastic input producer D&L Industries Inc. said it expects better second-quarter financial results than in the first three months of the year as the lower inflation rate could boost consumer spending.
Net income rose just one percent in the first quarter of 2019 to P748 million year-on-year.
D&L president and chief executive Alvin Lao said in an interview after the stockholders’ meeting Tuesday prices of commodities remained low while fuel prices were also on a decline. The positive trends should put more money in the pockets of consumers.
Lao noted noted consumer spending was being boosted by the influx of foreigners while borrowing costs were expected to go down as the government’s move to reduce the banks’ reserve requirements was injecting more liquidity into the market.
“While there is more liquidity, the cash requirements of corporations remain the same so banks will have to be more competitive by lowering their rates to be able to lend more,” said Lao.
Lao, however, noted that the second quarter had less working days this year because Holy Week fell on April.
The recent elections also had a lesser impact on consumer spending this year because of the delayed approval of the 2019budget. “We didn’t see any impact because there was no budget (approval),” Lao said.
D&L declared cash dividends amounting to P2.04 billion, up 10 percent from last year’s P1.86 billion. The dividend is equivalent to 64 percent of last year’s recurring income.
The dividends consist of a regular cash dividend of P0.223 per share plus a special cash dividend of P0.063 per share to shareholders of record as of June 26. Ex-date is effective June 21 and payment is set on July 22, 2019.
In total, shareholders will receive dividends of P0.286 per share, or a yield of 2.8 percent based on June 7’s closing price of P10.20.
D&L reported recurring net income of P3.2 billion in 2018, up 10 percent on year, on the back of higher sales volume and gross profit margin expansion. The company’s return on equity and return on invested capital were at 19 percent and 22 percent, respectively.
