Pure Foods income up 25% in Q1

The food unit of conglomerate San Miguel Corp. grew its first quarter net profit by 25 percent year-on-year to P699 million as higher volume and selling prices boosted revenues while input costs declined.

San Miguel Pure Foods Co. said it achieved this bottom line on the back of a 3-percent year-on-year rise in three-month consolidated revenues to P23 billion.

The company cited increased volumes, better selling prices and lower costs of raw materials.

The company reported a turnaround in its agro-industrial businesses compared to that of a year ago, when margins were depressed by high prices of corn and a shortage in cassava due to a typhoon that hit the country 2011.

“Better selling prices, improvements in its hog growing facilities, and the increased availability of cassava, accounted for this recovery,” the company said in its disclosure.

Pure Foods said the flour and “value-added” businesses also remained major contributors to its bottom line. Volume growth and breaks in raw material prices, particularly of wheat and dairy ingredients, were descrbed to be the main profit drivers.

The “value-added business” refers to manufacturing operations carrying core brands Purefoods and Tender Juicy, along with Magnolia’s dairy, fats, oils and ice cream, and San Mig Coffee.

The company said these manufacturing operations delivered strong sales results, with many of the brands posting double-digit growth.

Purefoods also recently integrated key businesses into one management structure.

With the integration, the Pure Foods hopes to “harness synergies, provide strategic focus, and improve operational efficiencies across the food group, and deliver the best results,” the company said.