URC posts 7.7% profit growth

Universal Robina Corp. (URC), the food manufacturing arm of the Gokongwei family’s JG Summit Holdings Inc., registered a 7.7- percent growth in net income during the first six months of its fiscal year ending September 2004.

Financial statements filed with the Securities and Exchange Commission showed that URC’s net income rose to P1.04 billion from only P966.04 million a year ago, boosted by the strong performance of its Branded Consumer Foods (BCF) business.

Net sales and services amounted to P13.41 billion, up by 15.6 percent from the year ago level of P11.6 billion. The improvement was due to the 31.4-percent revenue growth of its international operations in Southeast Asia and the significant increase in sales of its agro-industrial and commodity foods businesses.

URC International’s revenue contributions already account for 21 percent of URC’s total revenues.

Income from operations increased 4.6 percent to P1.36 billion notwithstanding higher operating expenses. Operating expenses, on the other hand, rose 14.4 percent to P2.2 billion as against P1.94 billion a year earlier as a result of expanding regional operations and sustained marketing activities.

Cost of sales and services likewise grew 17.6 percent to P9.8 billion compared with P8.4 billion for the same period last year. The increase was primarily due to higher sales volume and costs of major raw materials particularly for flour and feeds products and in the manufacture of BOPP films by the packaging division.

The BCF, including the packaging division, contributed P9.9 billion in revenues or an increase of 10.3 percent from the same period last year. This was attributed to the continued strength of the company’s core product categories such as snacks, candy, chocolate, noodle and biscuit, complemented by strong exports.

The agro-industrial business unit posted net sales of P1.9 billion or an increase of 29.4 percent from the year ago figure, mainly due to higher prices and volume sold by the company’s feeds and farms businesses.

URC’s commodity foods business unit pumped in sales of P1.6 billion, 39.2 percent higher than the previous year’s P1.2 billion.

URC expects its revenues and operating income to improve further for the second half of its fiscal year as it continues to expand its regional operations and firm up its dominant position in the domestic branded consumer food business. It also intends to build strong brands, continuously improve product quality and cost competitiveness by streamlining plant operations and increasing efficiencies.

For this year, URC has earmarked $40 million for the expansion of its branded food operations in both local and international markets. Of this amount, $25 million will be used for offshore developments including the establishment of a $14-million candy plant in Vietnam.

URC also intends to expand its snack food capacity in Indonesia and its biscuit capacity in Thailand. – Zinnia dela Peña