URC profits rise due to sale of Oceania business

Published March 7, 2022, 3:56 PM

by James A. Loyola

Universal Robina Corporation (URC) reported a 109 percent rise in its unaudited 2021 net income to P24.3 billion from the same period last year mainly due to a one-time gain from the sale of its Oceania business.

In a disclosure to the Philippine Stock Exchange, the firm said “The sale provided an opportunity for URC to monetize the efficiencies and synergies it created in Australia and New Zealand, while reinvesting into higher-growth core markets such as the recently acquired Munchy’s business in Malaysia.”

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However, URC said its operating income and core net income from continuing operations both declined 8 percent, as record commodity prices translated into higher material input costs.

The impact on operating margins was tempered by price increases and various cost savings initiatives.

Sales, excluding Oceania, posted growth of 3 percent for the full year to reach P117.0 billion, with continuing limitations on mobility, consumer sentiment and supply chain disruptions from the second year of the COVID-19 pandemic, especially the Delta variant wave.

Sales of the branded consumer foods group (excluding Oceania) ended flat at P83.5 billion as key food and beverage markets, while slowly recovering, were still below pre-pandemic levels and aggravated by various lockdowns imposed across the region.

Domestic Philippines’ 2021 revenues were down 2 percent at P61.4 billion although positive signs of recovery were seen in the second half of 2021.

The International division grew 5 percent, on a constant currency basis, to close 2021 at P22.2 billion as the strong growth momentum in the first half was partially tapered by the resurgence of COVID-19 in the region.

Operations were also affected with government restrictions and workforce capacity limitations.

Sales of the Agro-Industrial and Commodities division ended at P33.4 billion, up 13 percent from the same period last year, driven by the strong performance of the Sugar and Renewables group following the acquisition of Central Azucarera de La Carlota sugar mill and Roxol Bionergy.

“While the challenges and uncertainties of hyper cost inflation, global climate and political turbulence persist, our growth momentum and organizational commitment to excellence give us cause for optimism in 2022,” URC President Irwin Lee said.

He added that, “We will continue to invest in our brands, build channel strength, make future bets in attractive white spaces, and operate efficiently and sustainably.”

 
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