Universal Robina Corporation (URC), the food and beverage unit of the Gokongwei Group, reported a 51 percent jump in unaudited net income to P3.2 billion in the first quarter of 2021.
In a disclosure to the Philippine Stock Exchange, the firm said “This performance was driven by growth in operating income, lower foreign exchange losses, controlled financing costs, and was further boosted by benefits from the Comprehensive Recovery and Tax Incentives for Enterprises (CREATE) Act.”
Total net sales reached P34.6 billion in the first quarter of the year, a 3 percent increase compared to the same period in 2020.
This was driven by the continued recovery of URC’s international business units and growth from its commodity division, which offset challenges in domestic branded consumer foods.
Operating income was up 9 percent versus the same period last year to end at P4.3 billion, growing faster than top line.
Despite rising commodity costs, URC’s sales growth coupled with strict cost discipline allowed for an improvement in margins of 61 basis points versus the same period last year.
Sales of domestic and international branded consumer foods amounted to P25.7 billion. Domestic revenues declined by 5 percent to close at P14.9 billion, as market sentiment continues to be challenged.
The Philippines business also experienced higher sales last year, with a strong first quarter in 2020 driven by pantry-loading from the Taal eruption in January 2020 and the first Enhanced Community Quarantine imposed by the Government in March 2020.
International revenues hit P10.8 billion, a growth of 11 percent versus last year, driven by the strong recovery of our ASEAN markets particularly by Vietnam and Thailand, as well as favorable exchange rates.
Sales of Agro-Industrial & Commodities divisions totaled P8.5 billion, a 10 percent increase versus last year, driven by the Commodities Foods Group posting strong growth of 19 percent.
“The acquisitions of Central Azucarera de La Carlota and Roxol Bioenergy Corporation continue to perform ahead of expectations as we improve operational efficiencies,” URC said.
The Agro-Industrial Group’s sales declined by 7 percent, with lower sales volumes due to the restructuring of its hog farming operations. This was mitigated by the expansion of its Animal Nutrition and Health (ANH) and Food, Drugs and Disinfectant (FDD) businesses.
“COVID-19 is still very much with us. In general, domestic sentiment remains muted, with many consumers still very cautious on spending,” URC President Irwin Lee said.
He noted that, “On the cost side, we face headwinds as commodity prices continue rising. Despite these challenges, we were able to gain market share, increase overall top line sales, and achieve good profit growth.”
Lee said that, “As the pandemic continues, URC will continue to navigate and mobilize in the face of change. We will build on every valuable insight and experience from 2020, stay attuned to market trends, and adapt when appropriate, all while keeping to our purpose: to delight everyone with good food choices.”