D&L Industries Inc. grew its net income by 15 percent to P2.2 billion in the first nine months of 2026, supported by recovering food operations, improved margins and shift toward higher-value specialty products despite weaker sales.
Third-quarter earnings, meanwhile, climbed 32 percent to P735 million.
“Our food business is starting to recover. Nine months net income is higher by 77 percent versus last year,” D&L President and CEO Alvin Lao told reporters on Friday.
Lao attributed the improvement partly to a better product mix, with high-margin specialty products accounting for 51 percent of the company’s total revenue, compared with 49 percent from commodity products.
“We also saw an improvement in our margins higher by 1.4 percent and part of this is because we see a better product mix. So now what we call high margin specialty products, or HMSP, is over half of our revenue, 51 percent,” he said.
The latest growth marked an acceleration from the 8-percent increase in net income recorded in the first nine months of 2025, when earnings reached P1.95 billion from P1.81 billion in 2024.
However, consolidated sales declined 4 percent to P39.65 billion from P41.29 billion.
Third-quarter sales also fell 12 percent to P12.87 billion from P14.69 billion.
Despite lower sales, gross profit increased 6 percent to P5.68 billion from P5.34 billion, while gross profit margin improved by 1.4 percentage points to 14.3 percent.
For the third quarter alone, gross profit rose 19 percent to P1.97 billion from P1.66 billion, with gross profit margin expanding to 15.3 percent from 11.3 percent.
The Food Ingredients segment delivered the strongest earnings improvement, with its nine-month revenues surging 77 percent year on year, supported by a 2.7-percentage-point expansion in margins.
D&L said the stabilization of coconut oil prices, one of its key raw materials, at around $2,000 per metric ton supported margin recovery.
Gross profit margins for its high-margin specialty products expanded by 2.4 percentage points during the period.
The company’s Specialty Plastics segment recorded a 30-percent increase in earnings, supported by 5-percent volume growth and a 1.9-percentage-point improvement in gross margins.
Consumer Products original design manufacturing earnings grew 3 percent as its Batangas plant continued to ramp up operations.
The Chemrez segment, however, posted a 27-percent decline in earnings following a strong performance in 2025, as demand normalized from last year’s high biodiesel sales base.
D&L’s export revenue declined 18 percent during the period, although exports of high-margin specialty products increased 14 percent.
Exports accounted for 23 percent of total sales. Lao said the company was also seeing improvements in its return ratios, with return on equity reaching 12.7 percent and return on invested capital at 9.8 percent.
The company’s free cash flow remained positive at P1.9 billion as of September, supported by lower working capital requirements as coconut oil prices normalized and reduced capital expenditures.
Capital spending reached P358 million in the first nine months, with Lao estimating full-year spending at around P500 million, below the previous year’s level.
The company’s debt-to-earnings before interest, taxes, depreciation and amortization ratio improved to four times from 4.3 times at end-2025, while its interest coverage strengthened to 3.6 times from 3.2 times.
Lao said D&L’s business model, which is almost entirely business-to-business and supplies manufacturers of essential products, helped position the company to withstand economic pressures.
“Our business is almost 100 percent B2B. We sell to mostly companies which make essential products. So that makes us an essential manufacturer of essential products also,” he said.
On Friday, D &L’s share price rose by 8 centavos to close at P3.57 each.
