D&L Industries Inc. said Wednesday it plans to repay the P3-billion worth of bonds maturing in September 2024 using its free cash-flow.
D&L president and chief executive Alvin Lao said in a news briefing the company has enough free cash-flow and access to credit lines from various banks to settle the maturing bonds in 2024 and service the P2-billion bonds maturing in 2026.
He said company has no immediate plans to issue new bonds to settle its maturities given the current high interest rate environment.
D&L raised P5 billion worth of fresh capital from issuance of its maiden bond offering in 2021 which was primarily used to complete its Batangas manufacturing facility.
The plant started commercial operations in July.
Lao said the government’s plan to increase mandated biodiesel blend to 3 percent from 2 percent amid higher fuel prices would boost the company’s profitability.
D&L owns Chemrez Technologies Inc., one of the leading coco-biodiesel manufacturers in the country.
The government passed the Biofuels law in 2016 with the intention of a 5-percent biodiesel blend. The present blend remains at 2 percent.
D&L reported that its net income in the first nine months of 2023 reached P1.8 billion, down 29 percent year-on-year amid the decline in exports business and expenses related to opening of its Batangas plant.
The company said excluding the impact of the Batangas plant, nine-month net income was down 11 percent to P2.3 billion.
“We see the near-term weakness in earnings masking the potential of the new plant. At the same time, we see an opportunity with the concurrent weakness in share price for long-term and value investors like us,” Lao said.
Lao said the Batangas plant would enable the company to explore opportunities, expand to new markets and expand the range of higher value-added products.