Food ingredients and plastics manufacturer D&L Industries Inc. said Wednesday it expects net income to bounce back to P2.6 billion this year.
D&L president Alvin Lao said in a virtual press briefing the P2.6-billion profit target for the year would match the company’s 2019 pre-pandemic profit.
Lao said the gradual reopening of the economy would help improve demand for food ingredients, which was significantly affected by the pandemic due to weak sales from food establishments and low foot traffic in shopping malls.
Lao said the company started to show signs of recovery in the fourth quarter of 2020 when its net income rose by 8 percent to P637 million.
Full-year net income was still down 23 percent to P2 billion.
“With better visibility on recovery and with the company being in a stronger operational position, there is reason to believe that our 2021 results will likely be better than 2020,” Lao said.
“Furthermore, our products generally serve basic industries. From our past experience, after every crisis, when recovery starts, we usually start seeing good growth in the businesses we are in. As a sign of our confidence, we remain committed to our expansion plan in Batangas and the Lao Family continues to buy shares in D&L,” Lao said.
Lao said the food ingredients segment which accounts for 25 percent of total group net income was expected to gradually recover in 2021. The segment registered sequential recovery in the fourth quarter with volume and earnings growing by 3 percent and 7 percent from the third quarter.
The company said that compared to year-ago pre-COVID level, earnings of the segment were lower by 45 percent in the fourth quarter, as various food companies still felt the impact of the lockdown.
The non-food segment performed better, it said. Chemrez, specialty plastics and consumer products, which account for a combined 75 percent of total earnings, were already operating above pre-COVID levels in the fourth quarter, the company said.