Vitarich income surged 547% to P259M

PHOTO FROM VITARICH CORP/WEBSITE

Animal feeds and food products manufacturer Vitarich Corp. reported a fivefold increase in its nine-month net income amid lower revenues as higher sales and chicken prices boosted its profitability.

In a disclosure on Monday, Vitarich said its net income totaled P259.1 million in the January to September period, surging by 547 percent from P40.05 million a year ago.

“Our priorities are to gain scale and pursue opportunities to drive profitable growth. Our nine-month performance reflects this and shows that we are on the right track with our long-term strategy,” Vitarich president and CEO Ricardo Manuel Sarmiento said.

READ: Lower costs boost Vitarich H1 income to P167M

Revenues dropped by 4.3 percent to P9.218 billion from P9.629 billion as the “favorable” volume growth and improved chicken prices in the foods segment fell short of offsetting the ongoing market adjustments faced by the feeds segment.

Even so, the gross profit expanded by 52.7 percent to P1.07 billion, driven by cost reductions in raw materials and ongoing farm efficiencies.

The operating profit tripled to P365.1 million as operating costs were maintained at 7.8 percent of revenues and other operating income was recognized.

It also reported that total administrative, selling, and distribution expenses rose by 19.7 percent primarily because of incremental costs for expanding distribution channels and e-commerce, including transportation and handling, labor, and other professional fees.

Revenues of Vitarich’s feeds segment decreased by 16.6 percent to P3.332 billion as it incurred a 15-percent increase in sales volumes, particularly in Luzon, as demand weakened due to the continued spread of African swine fever and low farm-gate prices in the first quarter. It accounted for 59 percent of the company’s revenues.

“On the other hand, customers are now encouraged to expand their placement volume due to continuous improvement in chicken selling prices. However, recovery was hampered by low availability of day-old chick in [the] third quarter,” the listed firm said.

But its foods segment, which accounted for 36.2 percent of revenues, reported revenues of P5.440 billion, climbing by 3.1 percent as the faster growth in the Visayas fueled sales volume that went up by 5.6 percent.

Although weaker average selling prices went down by 0.6 percent year-on-year, they improved by 9.2 percent from the three-year low in the first quarter when there was a surplus of chicken in the market.

Farms posted revenues of P446.5 million, growing by 25.8 percent largely on fair value adjustment on biological assets amounting to P140.2 million. It comprised the remaining 4.8 percent of revenues.

“In the fourth quarter, we expect the expanded distribution of Cook’s to boost the brand’s presence and enable retail demand. We will also launch innovations for consumers to enjoy diverse and unique culinary experiences,” Sarmiento said.

To date, its Cook’s brand is available in 358 stores in Luzon.