URC Q3 profit up 25.4% on stronger sales

Gokongwei-led consumer giant Universal Robina Corp. (URC) grew its third quarter net profit by 25.4 percent year-on-year to P2.47 billion on the back of improved sales and foreign exchange gains.

This brought URC’s nine-month net profit to P10.52 billion, rising by 40.3 percent year-on-year. This end-September bottom line achieved 85 percent of the P12.42 billion net profit that Bloomberg market consensus expects URC to deliver for the full year.

Compared to the second quarter net profit of P5.05 billion, however, URC’s net income declined by 51 percent. Earnings in the second quarter were bloated by P3.3 billion in nonrecurring gains arising from the sale of an idle parcel of land. For the third quarter, net sales rose by 2.6 percent year-on-year to P27.92 billion. This brought nine-month sales to about P85.8 billion, 0.8 percent higher year-on-year.

Based on URC’s regulatory filing, net sales recorded by its branded consumer food (BCF) group, excluding packaging division, slipped by 2.5 percent at end-Sept. due to the 4.9-percent dip in domestic business.

URC explained it had come from a high base in the comparable nine-month period in 2020. To recall, the Taal volcano eruption and the start of the pandemic last year led households scrambling for pantry essentials.

The overseas BCF business, on the other hand, posted a 5-percent increase in nine-month net sales to P16.13 billion. URC noted a strong sales momentum being carried into the third quarter, with major markets growing versus last year.

The branded consumer food business, excluding the packaging division, accounted for 70.4 percent of total URC sales for the period.

The packaging division delivered a 37.8-percent year-on-year growth to P1.185 billion due to better prices and strong volumes. URC’s agroindustrial group recorded P8.54 billion in sales, a decline of 7.4 percent year-on-year due to downsized operations at the farm segment.

Meanwhile, URC generated P16 million in net foreign exchange gains at end-September a turnaround from the P708-million loss in the same period last year. Bulk of this was achieved in the third quarter. INQ