URC nets P4.48 B in first half of fiscal year

MANILA, Philippines—Food and beverage company Universal Robina Corp. grew its net profit in the six-month period ending March by 36.5 percent year-on-year to P4.48 billion as treasury gains offset lower operating profits.

URC increased sales by 6.6 percent year-on-year from October 2011 to March 2012, the first half of its fiscal year, to P35.49 billion.

Core sales of branded food expanded by 13 percent in the same  period but this was offset by a decline in the sales of its commodity group, particularly sugar, whose selling prices had fallen sharply.

The group’s six-month operating income declined by 4.5 percent to P3.65 billion from the same period last year.

“This was mainly due to significantly lower selling prices of sugar and depressed prices for hogs.  The low pork prices have significantly affected all the players in the industry and were primarily caused by excessive meat importation that caused oversupply in the market, thus depressing prices..,” URC said in a regulatory filing.

The improved bottomline despite the dip in operating income, however, was due to “significant improvement in market values of bond and equity holdings and lower foreign exchange loss from foreign currency-denominated transactions,” it said.

Net cash position stood at P3 billion at end-March.  For every P1 of equity, URC had a debt of only 36 centavos — lower than 47-centavos at end-December, as the company retired $200 million worth of bonds in January.

URC’s business units performed as follows in the first six months of fiscal year relative to the same period a year ago.

Branded consumer foods boosted sales by 13.1 percent to P28.03 billion driven by the beverage division which expanded by 41.5 percent due to strong sales of a new product Great Taste White Coffee. Snacks and biscuits also expanded by a double-digit level.

International sales of branded consumer goods jumped by 13.2 percent in dollar terms amounting to $244 million, supported by strong sales growth from China, Vietnam and Malaysia while Thailand experienced some slowdown as an effect of a recent flooding.

The commodity foods business declined by 27.6 percent to P3.8 billion due a 52.2 percent drop in net sales of sugar, in turn due to lower volume and prices.  The flour business, on the other hand, grew by 16.5 percent due to higher volume and selling prices.

Sales of the agro-industrial group went up by 12 percent to P3.64 billion led by the feeds and farm businesses which respectively expanded by 14.4 percent and 9.5 percent.