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, hitting the 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.
PCPPI said its management continued to invest in its future growth, resulting in a 3-percent rise in operating expenses vis-a-vis the same period last year.
Cost of goods was lower by 2 percent due to lower sugar prices and productivity initiatives, resulting in a 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.
Cash flows from operating activities were used to fund capital expenditure needs and to pay off a portion of its bank debts. DORIS DUMLAO-ABADILLA