RFM profit dips to P1.06 B

Food and beverage producer RFM Corporation is expecting an 18.5 percent dip in net income to P1.06 billion last year from P1.3 billion in 2021 despite an estimated 15 percent growth in sales to P19 billion in 2022.

In a disclosure to the Philippine Stock Exchange, RFM Chief Executive Jose Ma. A. Concepcion III said the preliminary unaudited 2022 sales expanded on the back of both volume and price increases in RFM’s ice cream, milk and institutional segments.

RFM President and CEO Jose Ma. A. Concepcion III (Photo credit: https://www.rfmfoods.com)

Preliminary unaudited net income declined as margins compressed as a result of higher input costs, such as wheat, milk and sugar which RFM absorbed partly, as well as the bigger charge of electricity by RFM’s power supplier.

RFM also disclosed that its Board of Directors has approved a cash dividend of P350 million or P0.103871 per share payable on February 14, 2023 with record date as of January 19, 2023.

The P350 million cash dividend is 33 percent of the 2022 unaudited net income and is one of the dividend declarations made every year by the company with a usual total cash payout of 60 percent of net income.

At the end 2022, with RFM’s market value of P3.60 per share, the yield of the P350 million cash dividend is equivalent to 3 percent.

Concepcion noted that “RFM made a conscious effort not to fully pass on the higher costs of commodities and power to the consumers as it wanted to avoid demand contraction that could be inimical to sales in the long run.”

“Meantime, we continue to declare our usual dividends as we have a very strong balance sheet with no parent company bank loans even with the recently-approved and internal cash-funded big ticket capex projects” he added.

Concepcion also said that “RFM’s outlook for 2023 is continued growth in topline and single digit growth in income. RFM’s Royal and Fiesta pasta brands shall continue to strengthen their leadership in the pasta and sauce market while our Selecta Milk hopes to sustain the double digit growth over the years with more innovations.”

Meanwhile, he said “Our ice cream joint venture with Unilever is a big anchor for our topline and bottom line over the years and shall continue to be so in the future.”

Concepcion said that, aside from the strengthening of the peso versus the dollar, there are signals that commodity prices are reversing from their steep uptrend which will help recoup margins in 2023.