Beverage-maker Pepsi-Cola Products Philippines Inc. (PCPPI) posted a 42-percent year-on-year drop in first quarter net profit to P93 million as operating expenses increased while sales revenues were flat.
In a disclosure to the Philippine Stock Exchange on Friday, PCPPI said gross sales revenues stood at P8.2 billion, same level as last year.
PCPPI said it was able to maintain sales revenue at last year’s level despite stiff market competition and without the extraordinary kick from election-related spending seen last year.
On the other hand, PCPPI said its management continued to invest in operating expenses ahead of revenue for future growth, resulting in a 3-percent rise in operating expenses versus the same period last year.
Meanwhile, cost of goods was lower by 2 percent versus same period last year as a result of lower sugar prices as well as productivity initiatives that in turn resulted in gross profit of P1.5 billion.
While this figure was 2 percent lower versus last year, PCPPI said equivalent gross margin remained unchanged.
“Management believes in the long-term health of the business and thus continued to invest in capex (capital expenditure) and cost ahead of revenue,” PCPPI said.
Capital expenditure in the first quarter of 2017 amounted to P900 million as the company continued to invest in capacity and containers.
Cash flows from operating activities were used to fund capital expenditures needs and pay off a portion of the PCPPI’s bank debt.