Q2 2024 D&L Industries Inc Earnings Call Transcript
Key Points
- D&L Industries Inc (DLNDY) reported a 6% increase in net income for the first half of 2024 compared to the previous year, with a 13% increase quarter-on-quarter.
- High margin specialty products volume increased by 33% year-on-year, marking the fourth consecutive quarter of growth in this segment.
- Export sales contributed 33% to total sales, matching a previous record high, indicating strong international demand.
- The company achieved a free cash flow of PHP2.4 billion for the first half of the year, more than doubling the free cash flow from the entire previous year.
- The new plant in Batangas has become profitable, contributing positively to the company's financial performance.
- The sales mix is still not optimal, with a higher-than-desired proportion of low-margin commodity sales compared to high-margin products.
- The consumer products ODM segment experienced a decline, attributed to higher inflation and increased product costs.
- There is a lag in passing on increased coconut oil prices to customers, affecting margins in the high-margin specialty products segment.
- Utilization of the new Batangas plant is still below 50%, indicating underutilization of capacity.
- The company faces challenges in ramping up high-margin exports due to the time required for certification and client qualification processes.
Good morning, everyone.
Yes, hi, everyone. Good morning. welcome to the second quarter of D&L industries. Here with us today is Mr. Alvin Lao, President and CEO of D&L Industries to discuss the results. Without further ado I will now turn over the call to Alvin.
Hi, Everyone. Good Morning. Today we are closing first half results for 2024. So straight to the highlights we're happy to report that for the first half of the year, we had net income increased by 6% compared to last year and actually on a quarter-on-quarter basis, we're doing quite well with net income up by 13%. So this is second quarter of the year versus first quarter of this year as well.
And we have other highlights such as our high margin specialty products volume or HMSP volume is up by 33% year on year. And this is the fourth consecutive quarter. That volume is up for this
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