Food and beverage company RFM Corporation reported a 4 percent increase in unaudited first quarter net income to P334 million as sales grew 17 percent to P3.9 billion during the same period of 2022.

In a disclosure to the Philippine Stock Exchange, the firm said growth came on the back of both volume and price increases in its brands and products particularly in its ice cream, milk and institutional segments.

“Amid the inflationary situation in the economy today, RFM is trying to balance passing the commodity inflation thru managed price increases on one hand and absorbing the cost inflation on the other hand, because consumer spending power is constrained. We think if we pass on all the cost inflation, there will be demand destruction,” said RFM Chief Executive Jose Ma. A. Concepcion III.

He noted that, “While our net income for the first quarter shows a decent 4 percent expansion over 2021, we expect our margins to continue to be under pressure and thus we are cautious in our spending this 2022. We are finishing the capex we have already started and we are also reviewing other proposed capex in the meantime.”

“The strong pricing power of our brands especially in ice cream is helping keep margins from declining drastically. Our Selecta Milk is also driving volume growth for RFM,” Concepcion added.

He said that company’s balance sheet remains very strong with excellent liquidity and noted that the rise in raw material prices have increased also the working capital requirements for 2022 but the good cash position of the company funded all of the increase in working capital.

“RFM’s outlook for 2022 is continued growth in topline and single digit growth to flattish income. If commodity prices reverse from their steep uptrend, then income could possibly trend higher in the second half of 2022. RFM shall also continue its cash dividend payout of 60 percent of income,” Concepcion said.

RFM usually pays out its dividends in two tranches. One in the first half of the year and the other in the second half.