Gokongwei firm’s 6-mo profit down 23%

Gokongwei-led Universal Robina Corp. (URC) saw a 23-percent year-on-year decline in first semester net profit attributable to equity holders amounting to P4.81 billion on lower coffee volumes and higher selling and distribution expenses while foreign exchange gains dwindled.

For the second quarter alone, attributable net profit fell by 35 percent year-on-year to P1.86 billion, weighed down by P590 million worth of foreign exchange losses due to the combined effects of the depreciation of local currencies at international subsidiaries and the peso against the dollar. For the six-month period, foreign exchange gains declined to P164.45 million compared to P740.84 million.

URC’s net sales for the six-month period rose by 6 percent year-on-year to P64.4 billion, driven by strong growth in the international and agroindustrial and commodities divisions. Sales growth accelerated from 2 percent in the first quarter to 10 percent in the second quarter.

However, operating income for the first half fell by 11 percent year-on-year to P6.8 billion due to the challenging coffee business alongside higher selling and distribution expenses.

Irwin Lee, who was installed as URC president and chief executive in May, said: “We are pleased with our overall sales growth momentum and are working hard to address the short-term challenges to profitability brought about by peso devaluation and inflationary pressures.”

Lee has vowed to address challenges in a more intense domestic market and evaluate structural improvements to the business, including sales distribution and supply chain capabilities.

Sales of URC’s domestic and international branded consumer food and beverage products reached P50.4 billion in the first half, rising by a modest 2 percent. —DORIS DUMLAO-ABADILLA