Local Pepsi unit nearly triples profit

MANILA, Philippines - Listed beverage maker Pepsi-Cola Products Philippines Inc. posted hefty gains in its net income last year on the back of strong sales.

In its financial report, Pepsi-Cola said profits nearly tripled to P844 million last year from P289 million in 2011.

The robust earnings growth was backed by the surge in sales volume performance across brands and categories, with gross sales climbing 14 percent to P22.73 billion.

“This is a significant feat given the aggressive competition, marketplace challenges and heavy monsoon rains,” said Jika Dalupan, vice-president for corporate affairs and communications of Pepsi-Cola.

“We focused on driving growth of both the carbonated and non-carbonated drinks segments, in line with the strategy of ensuring affordability and availability across the Philippines,” she added.

Cost of sales, which consists primarily of raw and packaging materials, direct labor and manufacturing overhead, grew at a slower pace compared with revenues.

The company’s cost of sales rose nearly six percent to P14.2 billion from P13.45 billion a year ago.

Pepsi-Cola said it benefited from the price rollback of sugar, a major raw material for the company’s beverages.

Pepsi- Cola, the exclusive bottler of PepsiCo beverages in the Philippines which include Pepsi-Cola, Mountain Dew, Seven Up, Mirinda, Gatorade, Mug, Tropicana, Lipton, Sting and Premier, expects a better performance this year, an official said.

“On the back of this remarkable performance, we expect to improve further in 2013 with prudent cost management, increased marketing efforts and a generally positive economic environment,” said Pepsi-Cola president Partho Chakrabarti.

“We will continue to innovate with brands that will satisfy the thirst-quenching needs of the Filipino consumers,” he added.

Pepsi-Cola has just joined the fray in the powdered drinks category through Mirinda Powder Fun Mix as it aims to strengthen its non-carbonated business.

In September, it launched Tropicana Coco Quench, which is 100-percent freshly made from real coconut water. It will be available initially in the Philippines and later on to the rest of Asia as it seeks to expand its non-carbonated beverage segment.

The local Pepsi-Cola unit is partly owned by Lotte Chilsung, one of the biggest beverage companies in South Korea. The listed company has established manufacturing facilities across the country, serving at least 440,000 outlets and providing employment through its extensive distribution network.