URC profit down 23%

Gokongwei-led Universal Robina Corp. has reported a 23.6-percent year-on-year decline in its net profit for the nine-month ending June 2011, as higher inputs costs and depreciation of bond holdings gnawed on its earnings.

URC’s profit for October to June—the first three quarters of its fiscal year that ends in September—declined to P4.94 billion from P6.47 billion in the same period last year, the company reported Thursday, citing unaudited figures.

“The drop was due to the decline in the market values of bond investments and lower operating income despite higher sales,” URC said in a statement.

It noted, however, that its balance sheet remained healthy given its net cash position of P3.89 billion and its low debt level during the period.

Consolidated net sales and services for the nine-month period was up by 17.7 percent to P50.58 billion from a year ago driven by URC’s international branded food business and the strong growth of the commodity foods group.

“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 dropped 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.

URC’s branded consumer food segment, including the packaging division, increased sales by 17 percent to P37.56 billion in the first three quarter of fiscal year. This was driven by the strong growth in its overseas business.

Local food operations grew modestly by 5 percent to P21.85 billion as the double-digit growth in biscuits, cakes and chocolates was tempered with the soft sales of powdered and ready-to-drink (RTD) beverages categories.

In the meantime, the international food business continued to outperform local operations with Vietnam and Thailand leading the growth at 47.4 percent and 32.7 percent, respectively.—Doris C. Dumlao