Second-quarter earnings rose 2 percent to P714 million, tempered by record-high coconut oil costs but supported by strong gains from the Batangas plant and overseas sales.
Management’s view
“The second quarter proved challenging amid record-high coconut oil prices. Nonetheless, the company delivered a modest 2 percent year-on-year growth for the quarter,” D&L president and CEO Alvin Lao said in a statement.
“With coconut oil prices appearing overstretched, the second half is expected to benefit from more stable and potentially lower prices, supporting a stronger earnings performance compared to the first half. We maintain our outlook for double-digit net income growth for the year,” he added.
Economic tailwinds
“On the macroeconomic front, inflation has been on the downtrend. Interest rates have come down and will likely go down further. These should continue to stimulate economic activities and consumer spending,” Lao explained further.
“Meanwhile, the rollout of the 4 percent biodiesel blend mandate has been deferred, allowing industry players and the supply chain additional time to recalibrate operations—positioning the sector for stronger, more sustainable long-term growth,” he said.
Exports and operations boost performance
Overseas sales drove a 30 percent jump in gross profit in the first half, lifting exports’ share of total gross profit to 38 percent, with exports contributing 28 percent of total revenues.
The Batangas plant earned P597 million, triple last year’s level, pushing return on equity to 12.9 percent and return on invested capital to 10.1 percent.
Margins improved, with blended gross profit margin up 2.5 percentage points to 15.2 percent and the High Margin Specialty Products segment rising 3.9 points.
—Edited by Miguel R. Camus
