The Concepcion family’s food and beverage company, RFM Corp., said profits in 2022 fell as it partially absorbed higher energy and raw material costs to maintain market share.
RFM, which owns pasta brands Royal and Fiesta and Selecta Milk, said “preliminary unaudited net income” for the year was down 18.5 percent to P1.06 billion.
The company cited shrinking margins “as a result of higher input costs, such as wheat, milk and sugar which RFM absorbed partly, as well as the bigger charge of electricity by RFM’s power supplier.”
“RFM made a conscious effort not to fully pass on the higher costs of commodities and power to the consumers as it wanted to avoid demand contraction that could be inimical to sales in the long run,” company CEO Jose Ma. A. Concepcion III said in a stock exchange filing.
“Meantime, we continue to declare our usual dividends as we have a very strong balance sheet with no parent company bank loans even with the recently-approved and internal cash-funded big ticket capex projects,” he added.
Because of higher selling prices and volume growth, RFM sales last year expanded by 15 percent to P19 billion.
Gains were led by the company’s ice cream, milk and institutional segments, it said.
For 2023, RFM is expecting more stable input prices, which would improve the bottomline over the previous year.
“RFM’s outlook for 2023 is continued growth in topline and single-digit growth in income,” Concepcion said.
“RFM’s Royal and Fiesta pasta brands will continue to strengthen their leadership in the pasta and sauce market while our Selecta Milk hopes to sustain the double-digit growth over the years with more innovations. Our ice cream joint venture with Unilever is a big anchor for our topline and bottom line over the years and shall continue to be so in the future,” he added.
RFM said the board approved a cash dividend of P350 million or P0.103871 per share payable on Feb. 14, 2023 with record date as of Jan. 19, 2023.