D&L Industries, Inc.'s Q12024 Earnings Up 4% to P618 Million with Batangas Plant Almost Breaking Even; EBITDA for the Period was Up 17% YoY to P1.25 Billion

In the first quarter of 2024, D&L Industries' recurring income came to P618 million, or earnings per share of P0.087. With the Batangas plant nearly breaking even for the quarter, this is up 4% YoY. In 1Q24, EBITDA—which does not account for the impact of higher depreciation and interest payments resulting from the new plant—rose 17% YoY to P1.25 billion, demonstrating the fundamental resilience of the company's core operations.

“While it is still early days, the Batangas plant has already shown remarkable progress with respect to the ramp up of its operations as well as in surpassing its initial commitments with PEZA. With the current run rate, it is possible that we may see breakeven sooner-than-expected," remarked D&L President and CEO Alvin Lao.

“Meanwhile, we continue to closely watch macro factors which can potentially dampen business sentiment such as the lingering effects of inflation, depreciating peso, and even the excessive heat that may impact consumer spending patterns,” Lao added.

“Barring any unforeseen event, we keep our stance and continue to guide for at least double-digit growth in earnings for this year. Over the longer-term, we have a lot of confidence that the investments that we have made over the past years will pave the way for higher and more sustainable profit growth. To date, the new plant has been instrumental in opening up new markets for us as we aspire to become a truly global Filipino manufacturing company,” Lao concluded.

Since the start of its commercial operations (SCO), the Batangas plant has continued a steady and consistent ramp up in operations. In the first quarter of 2024, there was a marked improvement in its operations with the plant almost breaking even. From a P315 million loss recorded during the first quarter of commercial operations, losses have narrowed drastically to merely P16 million in 1Q24. With the current run rate, it is possible that the plant may breakeven ahead of the initial schedule of at least two years since the SCO.

In Q12024, the high margin side of the business has shown promising progress with margins already surpassing pre-pandemic levels. HMSP margins were up 4.5 ppts for the period mainly driven by better customer demand, improving mix within the various HMSP categories, and relatively less volatile commodity price movements during the quarter.

Meanwhile, the Batangas plant, which is mainly geared towards the development and manufacturing of higher value-added products, has consistently helped spur HMSP volume since the start of its commercial operations. Total HMSP volume was up 13% YoY in Q12024 and was up for three quarters in a row since the new plant started operations.