Further easing of restrictions boosts chemical, food maker profit

Further easing of restrictions boosts chemical, food maker profit

MANILA – Food and chemical products manufacturer D&L Industries is on track to hit pre-pandemic profit levels this year with the easing of the coronavirus disease 2019 (Covid-19) restrictions and the continued rollout of vaccination.

“…We now have Alert Level 2 and I saw some news (that) it’s possible in a few weeks, we could go to Alert Level 1 which would mean even more economic activity opening up, that will be very positive for us. And it’s Christmas now and then we are expecting pre-election spending so we could end up with (the) fourth quarter being very strong and even exceeding (the) third quarter. It is possible,” president and chief executive officer Alvin Lao in a virtual press briefing Wednesday.

Lao said while Covid-19 variants continue to emerge and contribute to uncertainty on economic reopening, the company remains optimistic on these catalysts to aid near-to-medium term recovery.

The company believes that pent-up demand is anticipated to contribute to higher spending during the peak holiday season, subject to the further easing of movement restrictions.

On the vaccination front, which is the true key to economic reopening, the country is making progress with around 30,108,097 Filipinos now fully vaccinated against the dreaded virus.

“We are on track to exceed the 2019 net income. However, compared to 2018 net income which is higher than 2019, we are only at 68 percent of 2018 net income so this year likely we will not hit the 2018 level but definitely seems we will be higher than 2019,” Lao said.

He added they are hopeful about reaching the 2018 net income level by next year, banking on further easing movement restrictions, continued vaccination rollout, the national elections ramping up public spending, and its Batangas plant coming online in 2022.

D&L Industries booked a 34-percent increase in net income to PHP768 million in the third quarter this year from PHP573 million in the same period in 2020.

This brings total net income for the first nine months of the year to PHP2.163 billion, which accounts for 83 percent of 2019 net income.

Lao said lower corporate taxes provided by the Corporate Recovery and Tax Incentives for Enterprises (CREATE) law had a 4-percent impact on its nine-month net income.

President Rodrigo Duterte last March 26 signed into law Republic Act (RA) 11534 or the CREATE Act that aims to attract more investments and maintain fiscal prudence and stability by introducing reforms to the corporate tax and incentives system.

RA 11534 cuts corporate income tax rate to 25 percent from the current 30 percent. This is retroactive from July 1, 2020. (PNA)

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