Strong domestic business boosts URC profit

Gokongwei-led Universal Robina Corp. (URC) grew its nine-month attributable net profit by 2.9 percent year-on-year to nearly P7 billion as strong domestic business made up for the decline in overseas revenues arising from adverse foreign exchange adjustment.

For the third quarter alone, attributable net profit fell by 6.2 percent year-on-year to P1.87 billion partly due to higher selling and distribution costs and larger foreign exchange net loss compared to the previous year. Core profit for the quarter, however, improved by 6.5 percent year-on-year to P3.1 billion, driven by a 6.2-percent growth in sales to P30.8 billion.

URC’s nine-month net sales hit P99.8 billion, up by 5 percent from the previous year, the firm disclosed to the Philippine Stock Exchange.

Operating income for the nine-month period, excluding hogs market valuation, grew by 9 percent to P11 billion, with margins improving by 40 basis points versus last year.

The branded consumer foods business advanced by 4 percent year-on-year to P79 billion, as the local business continued to improve.

Domestic revenue rose by 9 percent while operating income rose by 13 percent for the nine-month period, driven by the double-digit growth of the coffee business under Great Taste brand alongside the growth of Nissin and Payless noodles, Jack n’ Jill snacks and C2 ready-to-drink tea. Share of earnings from joint venture businesses with Danone and Vitasoy also contributed to the domestic business.

International revenues declined by 3 percent in peso terms to P31.1 billion due to adverse foreign exchange movement. Excluding the impact of foreign exchange adjustment, underlying international sales were up modestly, led by growth in Oceania, Myanmar and Vietnam. International operating income still grew by 7 percent from last year as margins expanded by 80 basis points.

The agro-industrial and commodities businesses grew nine-month sales by 9 percent year-on-year to P20.8 billion, while operating income rose by 3 percent.

The agro-industrial group increased sales by 18 percent, driven mainly by strong growth in animal feeds and pet foods while the commodities foods group recovered revenue, with flour posting a 17-percent sales growth, offsetting the 5-percent decline in the sugar and distillery business.—DORIS DUMLAO-ABADILLA