URC improves Q1 2019 net profit to P3.1B

MANILA, Philippines — Gokongwei-led Universal Robina Corp. (URC) improved first quarter net profit by 3 percent year-on-year to P3.1 billion as the domestic coffee business pivoted back to growth after a three-year slump while overall operating margins firmed up.

URC posted net sales of P33.3 billion, marking a 7-percent increase versus same period last year, driven by its businesses in the Philippines.

Operating income, excluding hogs market valuation, grew by 10 percent to P4 billion in the first three months, with margins improving by 32 basis points versus last year. This was attributed to higher sales volumes and average selling prices.

Lower foreign exchange gain and higher finance cost tempered URC’s net earnings for the period.

“We are very pleased with the results especially the stronger top line momentum coming from our businesses in the Philippines. While the environment continues to be very challenging, the transformation plans we have set in place have started to gain traction. The entire URC team is now heavily focused on execution with the aim of sustaining what we have achieved for the balance of the year and beyond. We also expect to hold or slightly improve our operating margins for the year,” URC president and chief executive officer Irwin Lee said in a disclosure to the Philippine Stock Exchange on Thursday.

Sales of domestic and international branded consumer foods grew by 5 percent versus same period last year, amounting to P25.7 billion. Domestic revenues for the quarter increased by 11 percent amounting to P15.6 billion driven by the good performance of all categories and especially with the rebound in the coffee business after a three-year decline.

International sales declined by 3 percent year-on-year in peso terms amounting to P10.2 billion, driven by foreign exchange devaluation in Australia and New Zealand ranging from 8-10 percent. International operating income, on the other hand, grew by 5 percent versus last year as margins expanded despite weaker currencies.

The industrial businesses posted a 16-percent increase in three-month sales to P7.2 billion, while operating income rose by 17 percent to P1.4 billion. Agro-industrial sales jumped by 21 percent, driven mainly by higher feeds sales.

The commodities division grew by 13 percent, with flour and pasta segment posting 25-percent growth on higher volumes, while sugar and renewable energy business achieved a 9-percent revenue growth as a result of higher selling prices.

URC has committed to reduce its packaging footprint and make 60 percent of its packaging recyclable.

“This transformation is in line with our vision for URC to become a preeminent sustainable enterprise. We will continue to deliver value for the business while at the same time, do what is right for society. We believe we can continue to do well by doing good,” he said.