URC posts 39% profit hike

MANILA, Philippines - Food and beverage giant Universal Robina Corp. (URC) recorded a double-digit earnings growth in the October to June period on strong sales and non-recurring gains.

In a disclosure, the food manufacturing arm of Gokongwei-led conglomerate JG Summit Holdings Inc. said its net income jumped 38.7 percent to P8.49 billion in the nine months ending June compared with P6.12 billion a year ago.

“Aside from higher operating income, the increase was due to higher other revenues as the company booked realized one-time gains from the sale of its investment portfolio last January 2013 and lower finance cost due to short and long term debts retirement,” URC said.

In the nine-month period of its fiscal year, URC posted a 13.3-percent increase in sales to P60.09 billion from P53.04 billion a year ago.

This allowed the company to grow its operating income by 32.1 percent to P7.63 billion from P5.78 billion last year.

“Lower prices of commodity inputs and double digit increase in sales volumes resulted in margin expansion for branded foods while the sugar business benefited from the early start of the milling season and farms from better selling prices of hogs,” URC said.

In the nine-month period, URC’s branded consumer foods (BCF) group, including the packaging division, recorded a 14.3-percent increase in sales to P47.65 billion from P41.69 billion posted in the prior year.

Sales of Philippines BCF jumped 22.4 percent to P30.87 billion from P25.22 billion.

“Beverage continued to be the key driver backed by the strong performance of the Great Taste coffee business and C2 ready-to-drink (RTD) beverage,” URC said, adding that it remained the market leader in salty snacks, candies, chocolates, and RTD tea in the Philippines.

Net sales of URC’s international BCF rose 10.5 percent to $387 million as Vietnam sales remained robust driven by ready-to-drink beverages C2 and Rong Do while contributions from the snackfoods business pick up.

“URC continues to be the market leader in biscuits and wafers in Thailand while C2 is now the number one RTD Tea brand in Vietnam,” the company said.

The commodity foods group, for its part, reported P6.86 billion in revenues, up 16.5 percent from P5.88 billion in the previous year.

Net sales of URC’s agro-industrial group inched up 2.1 percent to P5.58 billion in the nine months ending June.

The farms business’ sales expanded by a fifth but the feeds business posted a decline of 16.9 percent “due to lower volumes brought about by the relatively lower population of backyard hog raisers and increased competitive pressures,” URC said.

URC allotted P120 million for its capital spending this year, the bulk of which will fund new products of the branded consumer foods business and the remaining for the ethanol facility in Negros.

URC is the company behind brands like Jack n’ Jill, Hunt’s, C2, Blend 45, Uno Feeds and Cream All.