June 07, 2021 – D&L Industries declared today a regular cash dividend of P0.141 per share plus a special cash dividend of P0.05 per share to shareholders of record as of June 21, 2021. Ex-date is on June 16, 2021 and payment will be made on July 15, 2021.
Management remains highly committed to its dividend policy of a 50% payout ratio based on prior year’s net income. In addition, the company has resumed payment of a special dividend after it was paused last year due to the uncertainty brought about by the COVID-19 pandemic. While challenges brought about by the pandemic remain, management believes that with appropriate adjustments and operational contingencies already in place, D&L is in a far better position to thrive in an adverse environment and a potentially protracted economic recovery period. Moreover, as the majority of the products that the company manufactures cater to basic essential industries such as food, oleochemicals, plastics and cleaning chemicals, the company sees continued strong demand ahead.
From a capital structure perspective, the company is in a solid position to withstand external pressure. As of end-March 2021, it remained lightly-geared with net debt at 22% and interest cover at 30x. Given its strong balance sheet, the company believes that the costs associated with the construction of its new plant in Batangas should not impede its ability to continue to pay dividends consistently.
This year’s dividend translates to a dividend yield of 2.4% based on the stock’s last closing price of P7.94. Total amount to be paid to shareholders is P1.36 billion, which is equivalent to 68% of last year’s net income.
For the first three months of the year, the company posted an encouraging recovery with recurring earnings growing 35% year-on-year (YoY) and 9% quarter-on-quarter (QoQ) to P695 million. Including a one-time gain of P29 million related to the retroactive implementation of CREATE Act for the year 2020, total net income for the quarter stood at P724 mn, up 41% YoY. All of the company’s business segments posted positive YoY growth. The recovery was mainly driven by people and businesses gradually adapting to the new normal. With more than a year into the pandemic, D&L, as well as many of its customers, has found new ways to continuously operate despite various mobility restrictions. This is true, not just for the chemicals segment but also for the food ingredients space wherein many food companies are now better-equipped to service customers on a 100% takeout or delivery basis.
Compared to pre-pandemic levels, 1Q21 income seems to be tracking ahead of FY19 income but still slightly behind FY18 income. Assuming that 1Q21 income holds steady in the next couple of quarters, the company is set to at least reach its net income level in 2019.
Including this year’s payment, the Company has returned a total of P11.5 billion in cash to shareholders through dividends since the IPO in 2012. The company also paid a 100% stock dividend in September 2015.
D&L Industries is a Filipino company engaged in product customization and specialization for the food, chemicals, plastics and consumer products ODM industries. The company’s principal business activities include manufacturing of customized food ingredients, specialty raw materials for plastics, and oleochemicals for personal and home care use. Established in 1963, D&L has the largest market share in each of the industries it serves, as well as long-standing customer relationships with the Philippines’ leading consumer and manufacturing companies. It was listed on the Philippine Stock Exchange in December 2012. For more information, please visit //www.dnl.com.ph/investors/.
This press release may contain some “forward-looking statements” which are subject to a number of risks and uncertainties that could affect D&L’s business and results of operations. Although D&L believes that expectations reflected in any forward-looking statements are reasonable, D&L does not guarantee future performance, action or events.