Cosmos Bottling loses P64.7M in Q1

Weighed down by higher costs and interest expense, Cosmos Bottling Corp., a subsidiary of food and beverage giant San Miguel Corp., incurred a net loss of P64.67 million in the first three months of the year, from a net profit of P49.01 million in the same period last year.

Net sales revenues slightly fell to P2.06 billion from P2.09 billion due to lower sales volume. Cosmos said increasing major raw material costs such as sugar, crown, caps and tolling fees pushed cost of sales to go up to P1.63 billion from P1.54 billion.

Cosmos said gross profit dropped 20 percent to P437 million from P547 million primarily due to the combined effect of lower sales volume amplified by costs increases.

Interest expense and borrowing costs grew 29.2 percent from P48 million to P62 million as a result of increased borrowing and the long-term loan availed in the second semester of 2005. The decrease in other revenue to P3 million from P10 million, meanwhile, is due to the write-off of certain unbilled charges last year.

General and administrative expenses, on the other hand, went up to P96 million from P92 million.

In 2004, Cosmos restructured operations to bring in favorable results starting last year, despite a slump in the carbonated beverage industry. To ensure long-term viability and growth, Cosmos streamlined operations in five plants to reduce costs, enhance product quality and increase profitability.

Cosmos competes primarily with sister company Coca-Cola Bottlers Phils. Inc., Pepsi Cola Botters Phils. Inc. and Asiawide Refreshment Corp., and is the second largest softdrinks company in the Philippines in terms of sales volume as of end-2005.

The company’s branded products available in the domestic market nationwide are Pop Cola, Sarsi, Cheers Lemon and Orange, Jaz Cola and Sparkle. They are among the lowest-priced softdrinks in the market.

Cosmos maintains 39 sales offices and operates six manufacturing plants strategically located in Luzon and Visayas.

San Miguel acquired Cosmos from the Concepcion-controlled RFM Corp. in 2001 in a deal valued at P14 billion. RFM earned P11.5 billion from the sale of its 82.3-percent shareholdings in Cosmos.