D&L Industries, Inc. (DNL) reported recurring net income of P717 million for the first quarter of 2026, translating to earnings per share of P0.10. This represents a 5% increase year-on-year and a 12% improvement quarter-on-quarter, demonstrating the company’s resilience despite heightened geopolitical uncertainty and market volatility during the period.
The company’s performance was driven primarily by margin expansion and the sustained contribution of its Batangas manufacturing facility, which recorded its sixth consecutive profitable quarter.
“Despite a continued challenging first quarter, we delivered 5% earnings growth, underscoring the resilience of our business model,” said Alvin Lao, President and CEO of D&L Industries. “We have successfully navigated significant volatility—from sharp increases in coconut oil prices, one of our key raw materials, to oil price shocks driven by geopolitical tensions in the Middle East. The essential nature of our products provides stability, while our diversified portfolio enables strength in one segment to offset softness in another.”
D&L posted continued margin improvement during the quarter, supported by stabilizing input costs and effective pricing strategies:
- Blended gross profit margin (GPM) rose to 13.4%, up 0.7 percentage points year-on-year
- High Margin Specialty Products (HMSP) GPM increased by 2.8 percentage points year-on-year
The stabilization of coconut oil prices—settling at approximately USD 2,200 per metric ton after a period of volatility—contributed significantly to margin recovery. The company’s ability to implement price pass-through mechanisms also helped mitigate input cost pressures.
Geopolitical tensions in the Middle East pushed crude oil prices above USD 100 per barrel, impacting petrochemical-based raw materials and disrupting supply chains. Despite these challenges, D&L maintained operational stability through:
- Strong supplier relationships
- Effective pricing strategies
- Strategic inventory levels equivalent to approximately two months of supply “While the operating environment remains uncertain, we are confident in our ability to emerge stronger from each cycle,” Lao added. “Periods of disruption present opportunities to reinforce our role as a reliable supplier and trusted partner, delivering customized solutions in an increasingly complex market.”
D&L reported positive free cash flow (FCF) of P339 million in 1Q 2026, driven by:
- Lower working capital requirements following normalization of raw material prices
- Reduced capital expenditures after the completion of the Batangas plant
With no major capex planned in the near term, the company expects FCF to remain positive, providing flexibility to strengthen its balance sheet.
The company also reported improved return metrics:
- Return on Equity (ROE): 12.2% (+0.9 ppt vs. end-2025)
- Return on Invested Capital (ROIC): 9.9% (+0.6 ppt vs. end-2025)
As the Batangas plant continues to scale, D&L expects further improvements in profitability and returns.
Confidence in the company’s long-term outlook is reflected in continued share acquisitions by Jadel Holdings, the Lao family’s investment vehicle, which has increased its stake in DNL by approximately 4.4% since the pandemic. In 2025 and year-to-date 2026, Jadel acquired roughly 110 million shares combined.
At current levels, DNL offers an attractive dividend yield of approximately 5.9%, based on dividends declared in the previous year.
“Even amid global uncertainties and domestic market headwinds, we continue to see compelling value in fundamentally strong businesses with long-term staying power,” Lao concluded.
