Food and beverage firm RFM Corporation is optimistic about 2024 as it reported that the drop in raw material costs coupled with higher sales resulted in higher earnings last year—prompting it to declare P250 million in cash dividends.

RFM Chief Executive Jose Ma. A. Concepcion III disclosed to the Philippine Stock Exchange (PSE) that “RFM’s outlook for 2024 is continued growth in topline and single digit growth in income.”

“There is greater competition in the ice cream sector but improvement in margins is seen on most business segments with the softer prices of raw materials coming in 2024 compared to early 2023,” he noted. 

Concepcion added that, “our Selecta Milk brand is also seeing sustained growth over the years and we are supporting this with new capex (capital expenditures) and innovations, like what we are also doing with our new Fiesta carbonara sauce." 

“Our flour business is relatively strong and stable, and continues to support the vertically integrated model of our bread and pasta businesses,” he also said.

He pointed out that RFM’s strong balance sheet provides a ready war chest for any business opportunity that can add value to the Corporation.

Concepcion disclosed that the firm’s preliminary unaudited 2023 sales expanded by seven percent to P20.7 billion, supported by sales growth in milk, pasta, flour, ice cream and bread segments. 

On the other hand, preliminary unaudited net income for 2023 grew 14 percent to P1.2 billion from P1.07 billion in 2022 as margins rebounded from better cost of raw materials like wheat and milk.

“The hefty raw material price increases seen in 2022 and early 2023 reversed thru the year and helped RFM margins to recover although inflation dampened consumer demand to an extent,” said Concepcion.

He added that, “nonetheless, RFM Corporation continues to invest in its future growth as it completes this first quarter 2024 important capex projects in breadline and milk totaling P1.5 billion.”

“This capex, alongside the regular payment of dividends, were all funded by internally-generated cash and RFM parent company has no bank loans,” he said.

RFM’s Board of Directors approved a cash dividend of P250 million or P0.07419 per share payable on March 5, 2024 with record date as of Feb. 7, 2024. 

The P250 million cash dividend is one of the dividend declarations made every year by the company. In 2023 and 2022, the company paid P850 million in dividends per year. 

At the share price of P3 as of Dec. 29, 2023, the yield of the total 2023 P850 million dividend is 8.4 percent.