CHEMICAL firm DNL Industries Inc. said on Tuesday it expects to sustain its double-digit growth this year to about 10 percent and is confident about generating at least P3.2 billion in profit this year.
Alvin D. Lao, DNL president and CEO, said the company is enjoying a strong growth momentum, boosted by the expansion of both domestic sales and exports as the executives steer the company to focus on high-margin specialty products.
Lao added they see the domestic economy continuously growing while inflation remains low.
“We continue to produce more new products while venturing into new countries and entering new markets,” Lao said. He added the company “rounded off 2017 with double-digit growth, showing full recovery from a tough start to the year.”
“We see that our full-year results better reflect the long-term growth prospects of the business,” he said. “Going forward, we will continue to exercise discipline and excellence in R&D as we continue to target opportunities in the growing Philippine economy, as well as in our rapidly expanding export segments.”
The company said its net income last year reached P2.9 billion, some 10 percent higher than the previous year’s P2.63 billion.
For the fourth quarter alone, its profit rose 12 percent to P786 million, from the previous year’s P702 million. Lao said the company’s high-margin specialty products still drive its growth as its volume grew by 10.5 percent in the fourth quarter.
Revenues last year rose 25 percent to P27.77 billion, from the previous year’s P22.23 billion. Export sales for the full year of 2017 grew by 68 percent, as the contribution of exports to total sales now stands at 25 percent, from just 18 percent in full-year 2016.
With the company’s partnerships with Ventura and Bunge maintaining pace, the food ingredients segment is now the biggest contributor to exports, according to Lao.
The segment contributed 45 percent to total export sales compared with just 19 percent in 2016.
The food-ingredients segment grew its earnings by 11 percent last year, but in the fourth quarter alone, net income for the segment grew by 23 percent.
“2017 witnessed the first full-year contribution of the agreement with Ventura,” the company said.
Chemrez, meanwhile, posted 9-percent increase in net income last year, but the growth in the high margin oleochemicals business offset the weakness in biodiesel. Biodiesel ended 2017 with a narrower volume decline of 18 percent, compared to the 33 percent-volume decline recorded in the first half of the year. Meanwhile, high margin oleochemicals and specialty chemicals posted 12-percent volume growth.
“Moving forward, Chemrez’s growth is underpinned by the increasing appreciation of coconut-based products globally,” the company said.
The specialty plastics group grew its net income by 7 percent as a ramp up in sales toward the second half of the year compensated for the negative volume growth in the first half. The aerosols segment, meanwhile, remains the fastest-growing segment of the company, posting 20-percent earnings growth last year, as the group now contributes 6 percent to DNL’s overall consolidated income, compared with 3 percent five years ago. VG Cabuag