RFM net income down 63% in first quarter

The Concepcion-controlled RFM Corp. posted a 63-percent decline in net income during the first three months of 2001 as higher expenses related to its foreign exchange losses cut into its bottom line.

Statistics submitted to the Securities and Exchange Commission (SEC) showed net income plunged from P60 million last year to P22 million last quarter, although net sales improved almost four percent to P3.871 billion.

But based on income from operations, the RFM group enjoyed a six-fold growth from P49 million to P283 million as it was able to limit the cost of goods and operating expenses.

Despite the lower consolidated net earnings, RFM’s flagship unit, food processor Swift Foods Inc., made a profit turnaround in the same period, brought about by the improved selling prices of poultry products after the government tightened its policies on imported chicken parts.

SFI earned P51 million in the first quarter as against a net loss of P33 million a year earlier. This was on the back of a five percent increase in sales from P1.8 billion to P1.9 billion.

Aside from SFI, other RFM companies include softdrink maker Cosmos Bottling Corp., ice-cream leader Selecta Dairy Products Inc., the Nasdaq-listed semiconductor firm PSi Technologies and property firm RFM Properties.

During the quarter in review, RFM inked a P400-million partnership with Taiwan conglomerate Uni-President Enterprises Corp. for the latter‘s investment into RFM’s instant noodle business at the RFM-owned Philtown Technology Park in Batangas.

Last year, RFM boosted its net earnings almost seven times to P96 million, from P14 million in 1999, as it was able to generate additional cash from the sale of assets as well as proceeds from the listing of PSi Tech at the US Nasdaq counter.

The PSi listing generated a one-time gain of P724 million while another P400 million was generated from the sale of RFM’s 68-percent stake in Consumer Savings Bank.

These more than offset the group’s flat sales growth and the continued provisioning for its forex losses related to their P65-million convertible bond issue in 1996.

At end-March 2001, the RFM group had total assets worth P23.711 billion. – Conrado Diaz Jr.