URC nets P4.8B

GOKONGWEI-led Universal Robina Corp. grew its net profit in the quarter ending December 2015 by 47.3 percent year-on-year to P4.79 billion as higher sales of branded food were complemented by the sugar, renewable energy and feeds businesses.

The growth in net profit in October to December period outpaced the 16.1 percent rise in operating income as URC booked foreign exchange gains and mark-to-market valuation gains from a debt hedging mechanism used by New Zealand unit Griffins.

Operating income nonetheless increased as better cost management and lower input prices – such as for palm oil, creamer, robusta bean and PET (polyethylene terephthalateresin) boosted margins for branded foods.

In a disclosure to the Philippine Stock Exchange on Friday, URC reported a growth in sales of 11.3 percent for the first three months of fiscal year 2016 (beginning October 2015 and ending September 2016) with net sales amounting to P29.987 billion. Such strong sales were mainly driven by branded foods and complemented by sugar/renewables and feeds.

Philippine branded consumer foods business increased sales by 5.8 percent year-on-year to P15.69 billion while the international branded consumer foods recorded a 19.2 percent growth to P8.98 billion.

Sales in the Philippines were muted partly due to a change in the mix of our coffee business with the shift to value for money offering of twin pack with lower selling prices. “We are still experiencing the effect El Nino showing minimal growth in Mindanao area and wholesaler accounts which covers traditional sari-sari stores. Lastly, aggressive moves of competitors to recover or gain market shares was felt across all categories especially on snackfoods and coffee,” URC said.

Beverage remained as the main driver for growth with C2 performing very well while the domestic business showed mixed results with chocolates and noodles growing double digits while snacks, bakery and candies grew at low single digits.

On overseas business, Vietnam, Indonesia and New Zealand contributed to the strong top-line growth. Business in Thailand was down by 2.3 percent due to lower sales of biscuits.