RFM expects profits to grow 15% this year

MANILA, Philippines - RFM Corp., the company behind Selecta ice cream and Swift hotdogs, expects profits to grow by around 15 percent this year, its top official said.

Sales would be carried by higher consumer spending while softening cost of raw materials will increase margins.

“Definitely it would be much better in 2012,” Jose A. Concepcion III, president and chief executive of RFM, said in an interview.

Concepcion said that the targeted 15-percent earnings growth for the first semester might be the trend for the entire year.

Last year, the food manufacturer posted a net income of P503.80 million, down by 19.4 percent compared with the previous year due to high cost of raw materials.

“Consumer spending is getting higher now,” Concepcion said.

For revenues, Concepcion said RFM would breach the P10-billion mark this year.

Total revenues of RFM rose by 9.15 percent to P9.9 billion last year from P9.07 billion a year ago.

Specifically, Concepcion said the launch of “Magnum” ice cream that targets the “premium mass” segment would increase the market share of Selecta ice cream.

Selecta ice cream, a joint venture with Anglo-Dutch consumer goods giant Unilever, already corners 71 percent of the market.

Escalating energy costs, particularly fuel, would not burden the company so much this year given softening prices of raw materials, Concepcion said.

“What’s more important is commodity prices, which has a bigger impact on us,” Concepcion said. Main inputs of the company’s products include oil, sugar and milk.

RFM is also into the flour-based businesses through White King Fiesta that corners around 30 percent of the spaghetti pasta category.