URC earnings jump 26% to P2.9B in Q4 2013

MANILA, Philippines - Snacks and beverage giant Universal Robina Corp. (URC) grew its earnings by a quarter in the October to December period last year, driven by strong sales of its branded consumer foods.

In a disclosure, the snacks company of tycoon John Gokongwei said its net income surged 26 percent to P2.889 billion while net sales jumped 13.1 percent to P22.705 billion in the first quarter of its fiscal year 2014.

“URC’s Philippine branded consumer foods business was the key driver for total company growth as it increased sales by 28.1 percent while international branded consumer foods recorded a 9.1-percent growth,” the company said.

In contrast, sales of non-branded consumer foods group declined 12.7 percent due to a decrease in turnover volumes for sugar and feeds, URC said.

URC’s operating income spiked 42 percent to P3.342 billion in October to December from P2.353 billion a year ago due to cheaper input costs and higher sales volume.

However, URC said profit growth was slower compared with the uptick in operating income “as we booked lower market valuation gains and net finance revenue given that we liquidated most of our bond and equity holdings last year.”

URC is the leader in branded snacks with a 39-percent market share locally: 36 percent for candies, 23 percent for chocolates and 81 percent for ready-to-drink tea. It is the company behind brands such as Jack n’ Jill, Hunt’s, C2, Blend 45, Uno Feeds and Cream All.

URC’s branded consumer foods group, including the packaging division, posted P18.83 billion in sales, up 20.3 percent from P15.658 billion a year ago.

The Philippines branded consumer foods business posted a 28-percent increase in sales to P12.69 billion from P9.91 billion, driven by beverage products.

“Our snackfoods segment also registered double-digit revenue growth across salty snacks, bakery and confectioneries,” URC said.

Sales of URC’s international branded consumer foods business improved 9.1 percent to P5.933 billion as Thailand and China contributed to the good topline growth.

For this year, URC allotted P9 billion for capital expenditures (including maintenance capex). It is higher than the P5.54 billion for fiscal year 2013, P5.12 billion for 2012 and P4.55 billion for 2011.

Specifically, URC allotted P5.73 billion for the installation of new lines to expand capacities in the snack foods and grocery products in the Philippines; new manufacturing plants, beverage and bakery lines in Vietnam; and expansion of biscuits and wafer lines in Thailand.

It will also spend P3 billion for the completion of bioethanol plant, construction of a power cogeneration plant and maintenance capital expenditures.

The agro-industrial group secured P270 million for farm expansion and handling facilities for feeds division.