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Makers of chemicals and food anticipate positive cash flow in 2017

D&L Industries anticipates generating free cash flow this year as the opening of its new production facility in Batangas draws closer.

Alvin Lao, president, and chief executive officer of D&L, claimed the business generated a PHP890 million free cash flow in the first quarter of this year, a first in the previous two years, during the online annual stockholders meeting on Monday.

The amount spent on capital projects in the first three months of the year was PHP451 million, less than the roughly PHP3.5 billion spent in 2022.

“The improvement in cash flows gives the company the financial flexibility to reduce debt levels over time further,” he said. “Aside from the expansion plan in Batangas, there are no major capex (capital expenditures) planned.”

The commercial operation of the facility’s expansion is anticipated to increase the company’s ability to serve more customers worldwide by providing more premium coconut-based products.

It will improve the necessary capacities to make us more relevant throughout the entire production chain and serve our biggest and new customers globally, according to Lao.

The listed company reported significant earnings growth in the first quarter of this year, primarily due to March sales.

Net income in January equaled PHP152 million; in February, it increased to PHP196 million; and in March, it reached PHP246 million.

According to Lao, the high volume of orders from earlier times and the lingering consequences of high inflation were the key causes of the weakening in the year’s first two months.

Due to an improvement in sales mix and a greater blended gross profit margin, gross profit increased by 4% year over year to PHP1.4 billion in the first quarter of this year.

“Overall, the company expects a recovery in the next couple of quarters as volumes seem to be coming back and as the company gears up for the start of commercial operations of its Batangas plant,” Lao continued.

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