Food and beverage firm RFM Corporation reported that its Board of Directors has approved the declaration of a P0.148388 per share equivalent to P500 million.
RFM Chief Executive Officer Jose Ma. A. Concepcion III said the cash dividend is payable on December 2, 2024, with record date as of November 6, 2024.
He noted that, RFM’s strong balance sheet and good income growth arising from better margins and higher volumes from key business units allowed for more cash dividends, amidst completion of big-ticket capital expenditure items in mid-2024.
Strong sales of Royal and Fiesta Pasta, as well as of Selecta Ice Cream thru the Unilever-RFM joint venture company, have pushed volumes up even as better margins drove income higher.
Based on preliminary, unaudited financials from the Company, sales from January to September improved three percent to P15 billion from the same period last year while net income rose 14 percent to P1.1 billion as of September 2024. Full year income last 2023 was P1.3 billion.
Concepcion also attributed the good performance of RFM to launches of new innovative products in key categories like milk, pasta and ice cream every year to spur growth organically.
For the current year 2024, the company has declared a total of P1.3 billion in dividends, or P0.385809 per share, higher than the P850 million in 2023. At the share price of P3.75 last October 18, RFM’s dividend yield is 10.3 percent.
Concepcion also said that major capex have been completed and cash in the balance sheet is adequate to fund the latest and biggest cash dividend declaration in recent years.
On his outlook for 2025, he said that the recent escalation of the war in the Middle East, if not contained soon, could push inflation via higher oil prices and eventually affect consumer demand, although the midterm election spending can provide some consumption support next year.
Concepcion also added that economic expansion and increased employment are strong anchors of consumer spending and so far, these economic indicators point to continued resilience and thus provide good support for spending.
Last August, RFM announced a cash dividend of P300 million or P0.089033 per share as Concepcion said "2024 looks to be a good year in terms of income growth as we are able to enjoy softer costs of raw materials."
Concepcion said RFM continues to keep adequate liquidity in the balance sheet even as it supports healthy levels of dividends every year.
The company's P1.1-billion bakery plant in Silang, Cavite is now operational; it was funded by internally generated cash and is RFM Corp.'s second bakery plant.
"RFM is also launching new products this year like the Selecta Flavored Milk and other milk innovations to maintain the growth momentum in RFM's milk segment.
“Our pasta business is also rolling out more innovations and we see that our Unilever RFM Ice Cream joint venture is able to sustain growth in 2024 with timely price adjustments to ensure affordability and healthy demand," said Concepcion.