RFM profit falls 43% to P300M

MANILA, Philippines - Food and beverage conglomerate RFM Corp. posted a net profit of P300.7 million in the first nine months of the year, down 43 percent from the same period in 2010.

RFM president and chief executive officer Joey Concepcion noted that most consumer food companies struggled to escape the impact of the general economic slowdown and rising commodity prices and cost of utilities that were pronounced in the first half of the year.

“However, as we search for ways to reduce our cost structures and improve operating efficiencies to cushion the effect of all these cost shocks, we can expect to recover some of our margins for the balance year,” he said.

Concepcion pointed out that better sales and effective management of costs during the period eased the impact of higher commodity prices felt in previous quarters.

The company has also revised its income guidance for the year to P450 million, 28 percent lower than the record P625 million reported in 2010.

The company registered faster sales growth of nine percent for the first nine months, amounting to P6.8 billion from P6.2 billion a year earlier.

Concepcion said despite inflationary fears and more rains this year that normally dampen demand, the company sustained its sales growth. “We believe that stronger brand equity and product innovations have influenced the shift in buying patterns and increased frequency in a number of categories, such as in Selecta ice cream, Selecta milk, Fiesta pasta, White King mixes, Sunkist litro pack and Swift Corned Beef Swak pack,” he said.

RFM earlier divested from its chicken and property development subsidiaries to focus on the faster-growing and core branded food and beverage operations.

Selecta Ice Cream, a joint venture with global giant Unilever, is increasing its leadership of its industry with market share going beyond 70 percent.

To support its continuous double-digit growth, Selecta recently expanded capacity and inaugurated its P800-million state-of-the-art ice cream facility in Manggahan, Pasig.

The flour-based businesses, led by the White King Fiesta spaghetti line, likewise continue to hit record sales levels, growing by close to 50 percent and practically exceeding rated capacity starting September, Concepcion said. RFM also recently refurbished its old mill into a P250-million modern flourmill to likewise support the growth of its Fiesta and White King products.