D&L Industries, Inc., a Filipino company that makes specialty ingredients and materials, has announced its financial results for the first half of 2026. According to a disclosure filed with the Philippine Stock Exchange on August 5, 2026, the company managed to grow its earnings despite facing several global challenges.
What Did D&L Earn?
Think of net income as the money a company gets to keep after paying all its bills and expenses. D&L’s net income for the first six months of 2026 reached P1.5 billion, which is 8% higher than the same period last year. For the second quarter alone (April to June 2026), the company earned P786 million, up 10% compared to the same three months in 2025.
What Does D&L Do?
D&L Industries makes customized products for different industries. Imagine a company that creates special ingredients for food companies, materials for plastic manufacturers, and chemicals used in soaps and shampoos. The company has been doing this since 1963 and works with many of the Philippines’ biggest consumer and manufacturing companies. It has been trading on the Philippine Stock Exchange since December 2012.
Good News: Better Profit Margins
One important measure of a company’s health is something called “profit margin” – this tells us how much money the company keeps from each sale after paying for the raw materials and making the product. D&L’s High Margin Specialty Products (HMSP) – which are their more profitable items – saw margins improve by 2.1 percentage points during the first half of 2026.
The company also shifted more of its sales toward these specialty products, which now make up 51% of total sales. This is good because specialty products typically earn the company more money than basic commodity products.
Why the Improvement?
A big reason for the better margins is that coconut oil prices have been stabilizing. Coconut oil is one of the main raw materials D&L uses. According to the company, coconut oil prices had nearly tripled from their 2023 lows to their peak in 2025, which made it very expensive to make products. Now, prices have stabilized at around USD 2,100 per metric ton, making it easier for the company to manage costs.
Company Finances Getting Stronger
D&L reported several positive financial improvements:
- Free Cash Flow: This is the extra cash a company has after paying for everything it needs to run the business. D&L’s free cash flow turned positive at P2.3 billion for the first half of 2026, mainly because they needed less money tied up in inventory as coconut oil prices normalized.
- Less Debt Burden: The company’s “net gearing” (a measure of how much debt the company has compared to its equity) improved to 91% from 96% at the end of 2025. Lower is better because it means the company is less dependent on borrowed money.
- Better Interest Coverage: The company’s ability to pay interest on its debts improved to 3.9 times in the second quarter of 2026 from 3.2 times for the full year 2025. This means the company is earning almost 4 times what it needs to pay its interest bills.
- Return on Equity (ROE): This measures how well the company uses investors’ money. D&L’s ROE reached 13.2%, up 1.9 percentage points from the end of 2025.
What the CEO Said
D&L President and CEO Alvin Lao explained that 2026 has been challenging due to geopolitical tensions, supply chain disruptions, elevated inflation, and higher interest rates. However, he said the company’s diversified business and essential products helped it navigate these difficulties.
Lao noted that the Food Ingredients business, which had been struggling, delivered a significant turnaround in the second quarter of 2026, suggesting that “earnings have likely bottomed and reached an inflection point.”
How Each Business Segment Performed
Food Ingredients
This segment had been struggling due to volatile coconut oil prices, but showed strong recovery in the second quarter of 2026. While earnings for the first half were still 12% lower than last year, the second quarter saw a complete turnaround from a loss in the same period last year, with earnings improving 75% compared to the first quarter of 2026.
Chemrez
This segment’s earnings decreased 17% compared to last year, primarily due to lower biodiesel sales and scheduled plant maintenance. However, the company remains optimistic about long-term growth with its newly operational Batangas plant.
Specialty Plastics
This segment performed well with earnings increasing 24% year-over-year, driven by 27% volume growth. Despite supply chain disruptions from the Middle East conflict, the company successfully secured raw materials and maintained supply to customers.
Consumer Products ODM
This segment continued strong growth with earnings up 27% year-over-year. Export sales now account for 19% of this segment’s revenues, up from virtually zero five years ago.
Company Stock and Debt Details
According to the filing, D&L has 7,142,857,990 common shares outstanding as of June 30, 2026. The company also has P2 billion in 5-Year Series A Bonds and total debt of P24.95 billion as of March 31, 2026.
CEO Lao mentioned that the company’s stock offers an attractive dividend yield of approximately 6.7% based on dividends declared in 2026. He also noted that Jadel Holdings, the Lao family’s holding company, has been purchasing shares and has increased its stake in D&L by approximately 4.4% since the pandemic. In 2025 and year-to-date 2026, Jadel acquired approximately 106 million and 7 million shares, respectively.
Looking Ahead
The company expects free cash flow to remain positive as long as there are no significant commodity price shocks. With the completion of the Batangas plant, no major capital expenditures are anticipated in the near term, which should help the company continue reducing its debt levels.
Source Note:This article is based on the company’s official press release and disclosures filed with the Philippine Stock Exchange’s Electronic Disclosure Generation Technology (PSE EDGE) system. For the complete and official version of the announcement, readers may visit the PSE EDGE website and search for the company’s filing directly.
