URC nets P3.44B

Regional food and beverage giant Universal Robina Corp. posted a 4.2-percent year-on-year decline in first quarter net profit to P3.44 billion due to lower market gains on hedging instruments.

URC posted net sales of P30.689 billion for the first three months of the year, marking a growth of 7.6 percent driven by branded consumer food business in Thailand, its New Zealand unit Griffin’s, its sugar and renewables segment alongside additional sales from recently acquired company, Snack Brands Australia.

The branded consumer food business in the Philippines (including packaging) and abroad grew by 2.6 percent and 16.1 percent, respectively.

Sales of non-branded consumer foods group – composed of agro-industrial group and commodity foods group – increased by 8 percent year-on-year, with both groups growing at the same rate.

URC’s three month operating income declined by 5.2 percent year-on-year to P4.03 billion due to the lower contribution of the branded consumer food business in Vietnam as a result of the recall issue last year, when two batches of C2 drink moderately exceeded the Vietnamese government’s lead content benchmark.

The group has been recalibrating its warehouse facilities in Vietnam and rebuilding its beverage brands that were recalled.

URC’s branded consumer food business also faced some challenges in maintaining profitability given the significant input cost inflation, volatile foreign exchange, higher distribution costs and higher investments in advertising and promotions.