Pepsi-Cola Phils income jumps 58%

MANILA, Philippines - Pepsi-Cola Product Philippines Inc. (PCPPI) reported a 57.65 percent earnings growth in the first half of its fiscal year ending June 2010, driven by higher sales of its non-carbonated drinks as well as effective cost management.

In a financial report submitted to the Philippine Stock Exchange, PCPPI said its net income for the period July to December 2009 amounted to P403.37 million compared with P255.87 million the previous year-period.

Net sales rose 7.9 percent to P7.48 billion from P6.93 billion as revenues from non-carbonated beverages (NCB) grew 27 percent due to the successful execution of the company’s distribution expansion and move to make its products more affordable to the consuming public.

“The sustained growth in NCB cushioned the impact of an intensified pricing and competitive environment in the carbonated beverage market,” PCPPI said.

Cash generated from operations for the semester was  P1.1 billion while capital expenditure was only P363 million.

PCPPI is putting up a new production line at its Cagayan De Oro plant, estimated to cost P350 million, as part of efforts to expand capacity.

The company earlier said it was ready to spend up to P2 billion for its capital expenditures for its current fiscal year, mainly for the expansion of existing lines and launch of new products to keep up with the increasing consumer preference for beverages associated with health and wellness.

The expansion would provide an additional six million cases of non-carbonated and carbonated drinks to PCPPI’s existing 170 million cases a year, which is expected to ensure sufficient growth for the company over the next five years.

PCPPI  also plans to further grow its NCB line through acquisitions.

The company expanded its NCB product offerings in line with its strategy to make their products available at affordable packaging across the nation.

PCPPI  currently holds 18 percent and 25 percent of the carbonated and non-carbonated beverage markets, respectively.

PCPPI is a licensed bottler of PepsiCo beverages in the Philippines, manufacturing a range of carbonated softdrinks and non-carbonated drinks that include brands, such as Pepsi, Diet Pepsi, Pepsi Max, 7Up, Diet 7Up, Mountain Dew, Gatorade, Lipton Iced Tea, Tropicana, Propel and Sting.