RFM sees strong 2019 amid easing inflation

MANILA, Philippines — RFM Corp., the Concepcion family’s listed food and beverage company, expects a stronger 2019 amid benign inflation which is expected to boost the purchasing power of consumers. 

Jose Ma. A. Concepcion III, president and CEO of RFM, said the company also sees a boost from mid-term election spending. 

“We continue to see healthy consumer appetite for our Royal and Fiesta pasta and sauce as well as in our Selecta Milk RTD for the first three months of the year. The late Holy Week in April 2019 compared to March 2018, softened our ice cream unit’s usual strong growth rate in the first quarter, but April sales are quite robust. Flour and institutional bread sales are growing at double digit rates as well,” he said.

On the cost side, Concepcion said the relatively stronger peso should help reduce input costs. 

However, Concepcion said RFM remains vigilant in monitoring the prices of raw materials especially sugar, packaging, milk and wheat.

“Hopefully, we see better pricing in these items in the coming months so manufacturers like RFM can sustain strong earnings growth,” he said.

In the first quarter, RFM’s revenue growth drivers were institutional sales of flour and bread, pasta and sauce, as well as milk.

 “Flour and institutional bread sales are growing at double digit rates as well,” he said.

Based on its unaudited first quarter results, RFM’s net sales reached P3.1 billion, up 11 percent year-on-year.

Last March, RFM paid a cash dividend of P280 million or P0.0805 per share which was the first of two tranches to pay out the company’s 50 percent yearly cash dividend policy based on recurring net income.