RFM Corp.’s net profit grew 30% to P130.3M in Q1

MANILA, Philippines – The Concepcion-led food and beverage company RFM Corp. grew its first quarter net profit by 30 percent to P130.3 million from a year ago as robust domestic consumer spending boosted sales revenues while input cost pressures eased.

RFM, in a press statement on Monday, attributed its performance in the first three months to higher sales revenues and easing of commodity cost inputs such as milk and sugar that started in the second half of 2011.

Rationalization of production processes and focus on higher-margin products also helped improve the profit picture. The company reported that its sales expanded by 16 percent for the first quarter to P2.4 billion.

RFM president Jose Concepcion III explained that Selecta, the company’s ice cream joint venture with Unilever, posted a sales growth of over 37 percent for the quarter.

“This rate would be even higher if we look at March alone year-on-year, since it was the month we introduced the latest ice cream craze Magnum (Belgian chocolate enrobed ice cream on stick),” he said.

Concepcion added that demand for Magnum had been way beyond expectations and stocks were running out, prompting the company to make arrangements to boost supply. Selecta Cornetto ice cream products have also been doing extremely well, with growth rates of 50-60 percent, the company chief reported.

RFM’s Fiesta pasta business also marked a growth of over 70 percent, resulting in an increase in its already leading market share to over 30 percent from 25 percent last year, Concepcion said. “The consistently firm pasta quality at affordable pricing levels made Fiesta more preferred nowadays than the traditional leading pasta brand,” the company said.

The company’s other White King brands of cake mixes and Arroz Caldo and Champorado have also sustained a 30 percent year-to-date growth from a year ago.

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

“As we become the market leaders in these categories, we are increasing the frequency of consumption and growing the size of the market.”

RFM reported that aside from Selecta ice cream and Fiesta pasta, sales of Selecta milk, Sunkist litro pack and Swift Mighty Meaty and Corned Beef Swak also performed “very well.”

This was attributed by the company to measures to rationalize and focus its brand portfolio, “supported by more exciting product repackaging, aggressive merchandising and trade-related programs.”