Universal Robina Corporation (URC) reported a 45.7 percent hike in attributable net income to P8.05 billion for the first half of 2021 from P5.53 billion in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said earnings growth was mainly driven by lower finance costs and net foreign exchange losses and higher other income from sale of fixed assets.
The firm booked a one-time gain from sale of idle land as well as benefits from the Comprehensive Recovery and Tax Incentives for Enterprises (CREATE) Act.
URC’s core earnings before tax (operating profit after equity earnings, net finance costs and other income) for the first half of 2021 amounted to P7.3 billion, a decline of 2.3 percent from P7.47 billion recorded in the same period last year.
Consolidated sale of goods and services inched up 1.7 percent to P68.53 billion for the six months of 2021.
“The COVID-19 pandemic continues to weigh down markets. Despite these challenges, we were still able to continue to gain market shares, grow topline, maintain profit, and increase cashflow,” said URC President and CEO Irwin Lee.
He added that “We are holding strong in weak market conditions in this crisis; but also using this crisis to prepare and reshape our business for long term sustained value creation. This gives us confidence to continue investing for growth while increasing returns to shareholders.”
URC also announced a 5 percent increase in dividends and a share buy-back plan for 2021 on the back of the higher net income and significantly stronger cash position.
Lee said URC’s strong financial position is also expected to be further bolstered by cash proceeds from the sale of its remaining 60 percent stake in the Unisnack Oceania joint venture.
In addition, returns to shareholders will be increased through a share buy-back plan initially targeted at P 3 billion.
Sales of URC’s branded consumer foods (BCF) segment, excluding packaging division, increased by 0.6 percent to P50.72 billion for the first half of 2021 from P50.39 billion in the same period last year.
BCFG domestic operations posted a 7.1 percent decrease in net sales from P31.381 billion for the first half of 2020 to P29.167 billion for the first half of 2021 due to “high base fueled by pantry stock up with
Taal eruption and the start of pandemic shifting household spending to pantry essentials.”
It added that, “Economic environment also affected consumer behavior as seen in the continued category declines.”
BCF international operations reported a 13.4 percent increase in net sales from P19.01 billion for the first half of 2020 to P21.55 billion for the first half of 2021, coming from strong sales momentum being carried into the secondquarter with most markets growing versus last year, coupled with positive impact from forex translation.
In constant US dollar terms, sales increased by 8.9 percent with mix results from major markets. Vietnam significantly grew by 51.3 percent driven by resurgence in beverage sales particularly C2 while Thailand recovered with 10.7 percent sales growth. Oceania grew 1.0 percent coming from high 2020 base.
Sale of goods and services of BCFG, excluding packaging division, accounted for 74 percebnt of total URC consolidated sale of goods and services for the first half of 2021.
Sale of goods and services in URC’s packaging division increased by 87.9 percent to P978 million for the first half of 2021 from P521 million recorded in the same period last year due to better prices and strong volumes.
URC’s agro-industrial group (AIG) posted sales of P5.43 billion for the first half of 2021, a decline of 15.0 percent from P6.39 billion recorded in the same period last year.
Feeds business posted a 5.4 percent decline while Farms business decreased by 38.1 percent as result of downsized operations.
Sales of URC’s commodity foods group (CFG) amounted to P11.41 billion for the first half of 2021, a 12.9 percent increase from P10.11 billion reported in the same period last year.
Sugar and renewables business grew by 16.9 percent due to higher volumes of sugar and distillery with the integration of La Carlota operations. Flour business is at par versus same period last year.