D&L Industries Inc. expects a stronger second half after growing first-half earnings, with management citing recovering consumer demand, easing raw material costs, and a turnaround in its food ingredients business as signs that profitability has reached an inflection point.

The listed specialty food ingredients and chemicals manufacturer reported on Wednesday an eight percent increase in net income to P1.5 billion from January to June, while second-quarter profit rose 10 percent year-on-year to P786 million despite disruptions from the Iran war.

“In the last couple of weeks, the traffic seems to have returned. There are a lot of people in restaurants and malls. So, it seems like it consumer spending is coming back a little. Thaat’s a sign. It looks like the consumer economy and our food ingredients business as well is getting better,” D&L President and CEO Alvin D. Lao said during a media briefing.

Another key boost has come from the easing of coconut oil prices, one of the company’s biggest cost drivers.

“Meanwhile, the gradual normalization of coconut oil prices is a welcome development. Our Food Ingredients business delivered a significant turnaround in the second quarter of 2026, which we believe signals that earnings have likely bottomed and reached an inflection point. 

As raw material costs stabilize and our portfolio optimization initiatives continue to gain traction, we are optimistic about the segment’s ability to deliver more stable and improved profitability moving forward,” Lao said.

Coconut oil prices have stabilized at around $2,100 per metric ton following a prolonged period of volatility, allowing margins to recover during the first half. 

Gross profit margins in the High Margin Specialty Products (HMSP) segment expanded by 2.1 percentage points as input cost pressures eased and price increases continued to take effect.

The improving margins were accompanied by a shift back toward higher-value products. HMSP accounted for 51 percent of first-half revenues after commodity products had dominated the sales mix in recent years due to higher biodiesel blending requirements. 

D&L said it expects HMSP to account for an even larger share of revenues over time as it continues to prioritize the segment.

Lao said the company’s earnings growth came despite a difficult operating environment.

Despite lingering macroeconomic uncertainties, the company remains confident in its long-term growth prospects. Lao noted that the Lao family’s investment vehicle, Jadel Holdings, has increased its stake in D&L by approximately 4.4 percent since the pandemic.

Management also expressed confidence in sustaining shareholder returns. 

At current share prices, D&L offers a dividend yield of approximately 6.7 percent, and Lao said the company expects to maintain dividends equivalent to 65 percent of the previous year’s net income, consisting of a 50 percent regular dividend and a 15 percent special dividend.