D&L Industries Inc. said Monday it plans to issue up to P5 billion worth of fixed-rate bonds in September to finance output expansion.
D&L president and chief executive Alvin Lao said in a news briefing following the annual stockholders’ meeting the company obtained shareholders’ approval to issue up to P5 billion worth of retail bonds. Other terms of the maiden bond offering are still being finalized.
Lao said the construction of a new manufacturing facility in Batangas experienced some delays with the implementation of stricter quarantine restrictions in April and the tightness in the supply and shipments.
He said the company was assessing the situation to determine the final timetable for the completion of the new plant.
The Batangas plant, which started construction in 2018, was originally scheduled for completion before the end of 2021. The new facility would cater to D&L’s growing export business in the food and oleochemicals segment.
It will add the capability to manufacture downstream packaging, thus allowing the company to capture a bigger part of the production chain. While the company primarily sells raw materials to customers in bulk, the new plants will allow it to “pack at source”.
Lao said given the company’s performance in the first quarter, it was tracking ahead of 2019 net income of P2.6 billion.
“Assuming that first-quarter net income holds steady in the next couple of quarters, the company is set to at least reach its net income level in 2019,” Lao said.
D&L’s net income grew by 41 percent year-on-year to P724 million in the first quarter.
The board of D&L declared a regular cash dividend of P0.141 per share plus a special cash dividend of P0.05 per share to shareholders of record as of June 21, 2021. Payment will be made on July 15, 2021.
The dividend translates into a dividend yield of 2.4 percent based on the stock’s last closing price of P7.94. Total amount to be paid to shareholders is P1.36 billion, or 68 percent of last year’s net income.