RFM’s profits up 10%; CEO warns of trucking, port congestion woes

MANILA, Philippines — RFM Corp. grew its net profit by 10 percent year-on-year in the first nine months of 2014 to P578 million but the food-and-beverage company warned that local industries were still grappling with constraints arising from trucking problems and port congestion.

RFM president and chief executive officer Jose Concepcion III said growth could have been stronger if not for the bottlenecks in operations caused by the Manila port congestion, aggravated by the shortage of delivery trucks. He attributed all these to what he called “poorly timed implementation of rules on franchised trucking services.”

In a disclosure to the Philippine Stock Exchange on Monday, RFM said the nine-month performance was achieved on the back of a 10-percent year-on-year growth in sales revenues to P7.84 billion.

Concepcion said growth had accelerated in the third quarter, pushing the year-to-date September revenue growth to 10 percent or twice faster than the pace seen in the first semester. He reported faster growth in the ice cream, pasta, flour mixes, milk and bread businesses.

While the problem was easing with remedial efforts from government, Concepcion said, there was still congestion and supply chain slowdown affecting the entire industry. He reported that congestion was still evident especially for deliveries of needed raw materials and packaging requirements, as well as deliveries of finished products to customers and distributors.

But Concepcion added that “despite the operational issues, RFM managed to find ways to improve the supply and distribution system which helped increase further revenue and profit growth in the third quarter.” He said the company was also able to manage operating expenses, while cost of certain critical inputs were also seen on a downtrend.

“We also saw double digit growth in our major consumer brands like Selecta in ice cream and milk, and Royal and Fiesta pasta, and we shall continue to prioritize our efforts in these categories,” Concepcion said.

“We expect even better numbers as we go to the last quarter of the year, with the usual surge in demand during the Christmas season,” he said.

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