By James A. Loyola
Universal Robina Corporation (URC), the food and beverage unit of the Gokongwei group, reported a 4 percent improvement in net income to ₱7.2 billion in the first nine months of the year.
In a disclosure to the Philippine Stock Exchange, the firm said earnings were driven by the growth in operating income offset by adverse foreign exchange impacts.
This is due to the sustained growth momentum of its Branded Consumer Foods and Agro-Industrial and Commodities businesses in the Philippines.
For the nine months of 2019, URC’s net sales reached ₱99.8 billion, a 5 percent increase versus the same period last year. Operating Income (excluding hogs market valuation) grew by 9 percent to ₱11.0 billion, with margins improving by 40 basis points versus last year.
Year-to-date sales of domestic and international branded consumer foods grew by 4 percent versus the same period last year, amounting to ₱79.0 billion.
Domestic revenues increased by 9 percent, and operating income rose 13 percent, driven by double-digit growth of Great Taste coffee; Nissin and Payless noodles; acceleration of Jack n’ Jill snacks and C2 ready-to-drink tea; plus contributions from joint venture businesses with Danone and Vitasoy.
International revenues declined by 3 percent in peso terms to ₱31.1 billion due to adverse foreign exchange translation.
On a constant currency basis, underlying international sales were up modestly, led by growth in Oceania, Myanmar and Vietnam. International operating income, on the other hand, still grew by 7 percent versus last year as margins expanded by 80 bps.
The Agro-Industrial & Commodities businesses continue to be a relevant and consistent contributor to total URC with year-to-date sales amounting to ₱20.8 billion, a 9 percent increase versus last year while operating income grew by 3 percent.
The Agro-Industrial Group increased sales by 18 percent, driven mainly by strong growth in Animal Nutrition & Health (animal feeds and pet foods).
The Commodities Foods Group recovered in terms of topline, with Flour posting a healthy 17 percent sales growth offsetting the 5 percent decline from Sugar and Renewables (SURE) due to the later importation scheduling and phasing versus last year of refined sugar.
“We are ahead of our internal targets; and therefore, we plan to further reinvest in brand building and distribution expansion to finish the year strong,” said URC President Irwin Lee.