Food and beverage firm RFM Corporation reported a 51 percent jump in its net income for the first three months of 2021 to P320 million due to stronger sales.
In a disclosure to the Philippine Stock Exchange, RFM said this is due to the sustained topline growth in milk, pasta, and flour, as well as the rebound in its ice cream and institutional bunline sales and income.
Total sales of RFM for the first quarter of 2021 reached P3.3 billion, 4 percent higher than in the same period of the previous year.
RFM’s milk, pasta and sauce brands grew 9 percent from year-ago levels alongside its ice cream business. Its hotcakes and bowl mixes business also grew 3 percent for the quarter.
“RFM’s portfolio of leading consumer food brands continue to deliver good sales growth and income momentum with the return of normal consumer behavior following the strict lockdowns in 2020,” said RFM President and CEO Jose A. Concepcion III.
He noted that, “Nonetheless, we see headwinds in the form of commodity and raw material price hikes that can dampen demand and squeeze margins. But the coming election spending should provide a good shot in the arm for consumer spending in the latter part of 2021.”
“We need to be more efficient in all aspects of the value chain for us to minimize the impact of the higher prices of oil, milk, wheat, paper and other costs of production,” added Concepcion.
He said that, “To target a growth in net income for 2021 despite the inflationary pressures on raw materials, we need better volume leverage and efficiency in operations.”
Concepcion also noted that consumer demand and spending can pick up as the vaccination rollout gains momentum by June onwards.
Meantime, Concepcion added that RFM plans to push through with its 60 percent cash dividend payout from its net income even as the Company continues to strengthen its core brands for faster organic growth of gross sales revenue.
Last March, RFM paid a cash dividend of P350 million, or P0.10387 per share. The dividend declaration is the first of two dividend declarations made every year by the company. The second dividend declaration is expected in the second half of the year.