BEVERAGE-maker Pepsi-Cola Products Philippines Inc. (PCPPI) posted a first semester net profit of P559.07 million, flat from the year-ago level, due to start-up losses from its snack manufacturing business.
For the second quarter, headline net profit rose by 8.5 percent year-on-year to P399.81 million, the company said in a regulatory filing.
But taking out extraordinary items from the start-up snacking business, PCPPI’s net income grew by 10 percent year-on-year and 15 percent for the quarter, the company noted.
PCPPI’s revenues in the first six months grew by 13 percent year-on-year to P18 billion, outpacing volume growth. The growth was attributed by the company to strong focus on revenue management and new product initiatives.
“We are pleased by the strong top-line momentum in the first half backed by powerful innovations and world class execution. Consumers loved our new innovations such as Mountain Dew Blue Shock, Mountain Dew Live Wire and Gatorade Fierce Green Apple” PCPPI president Furqan Ahmed Syed said.
Cost of goods sold increased by 17 percent for the quarter and for the first half of the year, driven by sharp increase in sugar prices which was partially offset by significantly higher productivity versus last year. As such, net profit increased for the second quarter year-on-year.
PCPPI booked a gross profit of P2 billion for the quarter, rising by 11 percent year-on-year. This brought first semester gross profit to P3.6 billion, up by 5 percent year-on-year.
Operating expenses expressed as a percentage of net sales declined by 118 basis points and 132 basis points year-on-year for the quarter and for the first half of the year, respectively, mainly due to cost control measures.
PCPPI plans to continue its growth momentum through distribution expansion, manufacturing infrastructure and capacity development, and product innovations.
Meanwhile, the company continued to expand the footprint of its snacks portfolio by growing its distribution footprint in Luzon.
“We are delighted that despite high sugar prices, our beverage team was able to deliver a double digit (core) profit growth for the quarter. This was made possible by strong revenue management, a record increase in productivity, reduction in operating expenses and delivering a relentless focus on ‘fewer, bigger, better’. We are also very encouraged by the initial roll-out results of our snack foods business and we are excited about the growth prospects”, Syed added.