Truck ban caps RFM income growth
MANILA, Philippines–Food and beverage group RFM Corp. grew its first-semester net profit by 10 percent year on year to P427 million as sales picked up pace in the second quarter despite the adverse impact of the truck ban in the capital city of Manila.
In a statement on Thursday, RFM reported that business improved compared to the 8-percent pace of expansion reported in the first quarter of the year. The double-digit rise in net income was achieved on the back of P4.99 billion in sales revenues for the first six months, up by 5 percent year-on-year, the company added.
RFM president Jose Concepcion III said the second-quarter sales growth was stronger than in the first quarter, but believed that the growth could have been faster by 15-20 percent if not for the operational bottlenecks caused by the Manila truck ban and severe Manila port congestion.
Concepcion lamented that the truck ban was followed by the delivery trucks shortage resulting from an interim timing issue on the implementation of rules on franchised trucking services, in turn adversely affecting the supply chain “of almost everyone in the industry.”
RFM’s woes with the truck ban echo industry-wide complaints.
Despite the operational issues, however, Concepcion said RFM had managed to post better profitability as its higher-margin core businesses performed better in the second quarter.
“The company was also able to manage its operating expenses, while costs of certain critical inputs were also tracking lower than previous periods,” he said.
“We also saw double-digit growth in our major consumer brands, and we shall continue to prioritize our efforts in these categories. We expect even better numbers as we go to the second half of the year, which is usually the stronger half. The port congestion and trucking issues should also be resolved to bring back normalcy in the flow of goods and lower the cost of operations,” he said.
He said RFM remained bullish on the market-leading position of core brands Selecta and Fiesta, adding that the Royal pasta brand had also put in greater value to the RFM business portfolio.–Doris C. Dumlao
