RFM profit up 18%

MANILA, Philippines - Listed food and beverage firm RFM Corp. recorded healthy earnings growth in the first quarter due to higher sales and better margins.

In a regulatory filing, RFM said its profits rose 18 percent to P153.7 million in the first quarter, ahead of its internal target for the period.

Sales revenue fell eight percent to P2.2 billion because of the disposal of its meat business late last year.

But this was offset by better margins in its core businesses, said RFM president and CEO Jose A. Concepcion III.

“The lower commodity input costs this year, such as for sugar and wheat, were important in keeping the cost levels down, as well as better yields due to scale economies as we reach high levels of production especially for Selecta ice cream and Fiesta pasta,” he said.

Selecta, the company behind premium ice cream Magnum, is a joint venture with Anglo-Dutch consumer goods giant Unilever. It already corners 74 percent of the local ice cream market.

RFM’s White King Fiesta division, which includes its fast-growing pasta business, holds 31.4 percent of the market.

“Stronger consumption spending is expected as the year progresses with continuous economic growth, but we expect the impact to be felt more in the second and fourth quarters,” Concepcion said.

Consumers firms expect better sales amid the election season.

Concepcion said Sunkist beverage and segments in Selecta ice cream and milk, Fiesta pasta, and White King cake mixes and sauces already posted encouraging growth.

Other products are still adjusting from relatively higher trade stocks in the fourth quarter, Concepcion said.

Moving forward, RFM targets to maintain its leadership in several lines while introducing new products and building up brand equity.