D&L posts record high 2022 profit of P3.3B

D&L Industries Inc., the Lao family’s food ingredients and plastics manufacturing giant, saw a banner year in 2022 after profits soared to a historic high of P3.3 billion.

The figure eclipsed the previous record of P3.2 billion in 2018 and was higher by 26 percent from 2021 as the company rode the economy’s recovery from the pandemic slump,

D&L, which makes ingredients and other specialized products such as frying oil, seasonings, syrups and pancake mixes used by the country’s biggest restaurant chains and consumer companies, said earnings were further bolstered by fast-growing exports.

“[O]ur record earnings this year demonstrated the resilience that we have built over the years through the various crises that we have gone through,” D&L president and CEO Alvin Lao said on Wednesday.

During a media briefing, Lao said profitability was expected to improve in 2023 as D&L raises the contribution of high margin specialty products (HMSP) after these gained momentum in the fourth quarter of last year.

Exports

“Over time, as commodity sales normalize and as the company continues to allocate much of its resources in growing the HMSP business, D&L expects to see a continued increase in HMSP revenue contribution,” it added.

It said exports, which account for nearly a third of revenues, was another “bright spot” as sales jumped 33 percent to P13.6 billion last year.

Lao said the business would grow further with the opening this year of its P10.2-billion Batangas manufacturing plant, which will produce coconut-based products for food and oleochemicals that are used to make personal hygiene and home cleaning products.

“We do expect [exports] to be even higher once the new plant is operating because the new plant is located in a [special economic zone],” he said.

The company is also projecting lower capital spending for the year due to the completion of its Batangas factory.

Together with more stable raw material prices, this would help the company generate free cash flow in 2023, Lao explained.

“While risk remains in the form of elevated inflation, threat of a US recession and a global banking turmoil, we are optimistic and focused on our long-term structural growth story,” Lao said.