RFM profit down 19%

Concepcion-led food and beverage group RFM Corp. posted a 19-percent decline in its 2011 net profit, as higher cost of goods gnawed at earnings early in the year.

In a disclosure to the Philippine Stock Exchange, RFM said net income last year, including minority interest, amounted to P503.8 million, down from P625 million in 2010.

The full-year 2011 results, however, surpassed market analysts’ yearend estimate of P420 million to P430 million as financial results in the second semester improved from a difficult first semester, RFM said in a statement.

RFM president Jose Concepcion III said that despite inflationary fears and more rains last year that normally dampen demand, the company did relatively well in terms of sales growth.

“We believe that stronger brand equity and product innovations have influenced the shift in buying pattern and frequency in a number of categories,” he said.

Higher revenue and the softening of the costs of inputs, such as milk and sugar, in the second half improved profitability in the second semester. It registered a net income of P291 million during the period, up by 37 percent from its first half income.

Topline sales grew by 10 percent in the second semester, accelerating from the 7-percent growth in the first half. This brought full year sales revenue to P9.9 billion, up by 8 percent from year-ago level.

“The focus on core food and beverage businesses is paying off,” Concepcion said.

“Selecta Ice Cream, a joint venture with world giant Unilever, is increasing its leadership of the industry with a market share going beyond 71 percent, coming from around 66 percent at the start of 2011. Remarkable growth was seen in Selecta-Hersheys, Supreme, Classic and Cornetto lines, with innovations backed by strong marketing campaigns,” he said.

Flour-based businesses also hit record sales levels, posting nearly 50 percent growth. This had pushed up its share in this market to 35 percent from 28 percent at the start of last year, Concepcion added.