D&L maintains high credit rating on fixed-rate bonds of ₧5-B

Chemical manufacturer D&L Industries Inc. said it maintained the high credit rating of its 5 billion pesos fixed-rate bonds.

D&L said it received a PRS Aaa rating with a stable outlook from Philippine Rating Services Corp.

Commitments rated PRS Aaa are of the highest quality with minimal credit risk. The debtor’s ability to meet its financial obligation under the obligation is extremely strong. PRS Aaa is the highest rating assigned by the rating firm.

A stable outlook is assigned when it is probable that the rating will be maintained or not changed over the next 12 months.

The rating and outlook were based on the following key considerations: D&L’s strong market position in the industries in which it operates, diversification of its product offerings and markets served, innovation-focused specialty products, sustained profitability in the face of prevailing market pressures, and prudent debt management and formation of an adequate cash flow.

“D&L continues to have a strong market position in its four core businesses, namely food ingredients, oleochemicals and other specialty chemicals, specialty plastics and original design consumer products,” the rating firm said in a statement.

“Based on its reputation and business experience, the company maintains longstanding relationships with leading consumer companies in the country. Amid the pandemic, the company has continued to operate and is approximately 95 percent complete on its expansion facility in Batangas (to date).

It says that D&L’s earnings provide geographic diversification, given that a significant portion of the company’s revenue comes from exports. In the first half of 2022, export sales accounted for 34 percent of total sales.

Export sales are expected to continue to expand following the targeted launch of the Batangas plant by January 2023. The said facility will primarily serve the export business in the food ingredients and oleochemicals segments.

D&L was able to maintain its conservative debt position. In September last year, the company issued its first bonds worth 5 billion pesos. The proceeds from the bond issue were intended primarily for the completion of the Batangas plant. Total debt was 13.7 billion pesos at the end of June 2022, down 1 percent from last year due to net loan repayments.