CHEMICAL firm D&L Industries Inc. on Thursday said its recurring income reached P1.53 billion in the first six months of the year, 13 percent higher than last year’s P1.35 billion as high-margin products continued to drive its growth.
Revenues for the first half grew 4 percent to P13.2 billion, from last year’s P12.7 billion.
Net income for the second quarter alone increased by 14 percent to P784 million, from P688 million last year.
Volume of its high-margin products grew 14 percent year-on-year, or twice the historical average of 7 percent. Revenue contribution was at 63 percent, up 58 percent last year.
“The remaining 37 percent of revenues was accounted for by D&L’s commodity business that saw its margins improve significantly for the second quarter,” the company said.
Blended commodity margins expanded further to 9.7 percent, from 6.5 percent last quarter and from just 4 percent in full year 2017.
Exports as percentage of total revenues stood at 21 percent during the first half. Export revenues dropped by 5 percent, normalizing from above-average growth last year.
Oleochemicals slightly overtook food as the biggest contributor to export revenues with a 35-percent contribution. This is primarily due to the strong demand for high-margin coconut-derived oleochemicals from developed countries.
Meanwhile, food ingredients contributed 33 percent to total export sales.
“Moving forward, the company continues to work towards its target of having export sales account for 50 percent of total sales,” it said.
The food-ingredients segment posted a 2-percent net income growth in the second quarter, a slight improvement from the flat-earnings growth in the first quarter.
The high-margin side of the business continued its growth momentum with volume growing by 21 percent in the second quarter, bringing volume growth for the first half at 17 percent. This has more than offset the 12-percent decline in commodity volume last year.
Chemrez delivered a 27-percent earnings growth in the first half of the year, largely driven by the strong performance of the oleochemicals segment which more than offset the weakness in the other specialty chemicals segment.
Oleochemicals are all chemicals derived from coconut oil.
This segment includes both high-margin oleochemicals, such as surfactant, foaming agents, MCT (medium chain triglycerides) oil and commodity biodiesel.