As the country’s war against the COVID-19 pandemic progresses, Gokongwei-led Universal Robina Corp. (URC) is bracing for the worst, albeit still hoping to see some business recovery by the end of this year.
During the company’s stockholders meeting on Thursday, URC president and chief executive Irwin Lee said the company had “planned conservatively” with a turnaround in mind.
Lee noted different territories were recovering at various paces.
He said URC’s operations in Vietnam and Thailand continued to bounce back in the first three months of the year following a business pickup that began in the second half of 2020.
But in the Philippines, business was still lagging, he said.
“I think vaccine rollout is still slowly happening. It’s in very early stages and therefore it will really depend on the success of those programs and the opening up of the economy,” he said.
From a low base seen last year, however, Lee said URC would likely post a stronger year-on-year growth in the latter half of this year.
“Right now, our business is holding. We’re continuing at a steady pace from what we saw in the second half of 2020 into the first quarter of 2021,” Lee said.
Vaccine rollout
“Of course we wish that the country will do better as we go along in the next few months and the vaccine rollout becomes more successful, and the economy can still open up even further. So we’re planning for the worst but we are hopeful that things will recover toward the end of 2021,” he added.
Citing various forecast models, Lee noted overall business recovery in the Philippines might not happen until 2022 or 2023. As such, he said it was better for URC to focus on things within its control: working well with customers, innovating based on consumer trends and providing for communities where it operates.
“But even though we are growth-minded, we are not compromising on our profit margin improvement. We believe that we can do both,” he said, when asked whether URC would focus on revenue or profit growth.
In the first quarter, URC grew its net profit by 51 percent year-on-year to P3.2 billion on the back of higher sales, lower foreign exchange losses and financing costs as well as tax cuts enabled by the new corporate tax regime.
Market sentiment
The firm also saw in the same period a 3-percent year-on-year growth in net sales to P34.6 billion, as its international business units and commodity businesses improved, offsetting challenges in the domestic branded consumer food segment.
First quarter sales of domestic and international branded consumer foods declined by 5 percent year-on-year to P14.9 billion, which the group attributed to a challenging market sentiment.