Universal Robina reports hefty decline in profits

MANILA, Philippines – Universal Robina Corp. posted a 23.6 percent year-on-year decline in its net profit for the nine-month period ending June 2011 as higher input costs and depreciation of bond holdings gnawed at the food and beverage company’s bottomline.

Citing unaudited figures, URC said its net profit for October to June – the first nine months of its fiscal year – declined to P4.94 billion from P6.47 billion in the same period last year.

“The drop was due to the decline in market values of bond investments and lower operating income despite higher sales,” URC said in a press statement. It noted, however, that its balance sheet remained healthy given its net cash position of P3.89 billion alongside low debt level during the period.

Consolidated net sales and services for the first nine months amounted to P50.58 billion, up by 17.7 percent from a year ago driven by URC’s international branded foods business as well as the strong growth of the commodity foods group in turn primarily due to high prices of sugar in the first half. “This was tempered by the modest growth of our domestic branded business with soft sales in beverages and a decline in our agro industrial group as it entered the down cycle,” it reported.

Despite higher sales, URC’s nine-month operating income decreased by 12.4 percent to P5.45 billion from a year ago.

“The global increase in commodity prices relative to last year’s prices eroded the company’s margins. Higher input costs were partly offset by selling price increases and profit improvement initiatives on the company’s products,” it said.