Corporate News

RFM 1st quarter earnings slip amid sluggish sales

Posted on May 09, 2017

EARNINGS of RFM Corp. dipped by 8% in the first quarter, as weaker sales and higher prices of raw materials weighed on the bottom line.

RFM Corp. reported an 11% increase in Selecta ice cream sales in the first quarter. -- HTTPS://WWW.FACEBOOK.COM/PG/SELECTAPHILIPPINES/
In a quarterly report filed with the stock exchange on Monday, the Concepcion-led food and beverage firm said its net income fell by 8% to P198.1 million during the January to March period, from P216 million recorded during the same period a year ago.

The lower profit was attributed to a 3% decline in sales to P2.55 billion in the three-month period, from P2.63 billion a year ago.

“Added to this, raw material prices in early 2017 have increased from their 2016 levels and affected both milk and ice cream margins,” RFM said.

The company’s Selecta ice cream brands registered an 11% increase in the first quarter, driven by its “intensive marketing campaign” to increase visibility of the brand around the country.

RFM said its Fiesta and Royal pasta brands saw sluggish sales in the first quarter, “affected by the observed large trade inventories that reduced new sales.”

Sales of Selecta Milk and White King mixes also jumped 8% and 6%, respectively.

However, RFM said the discontinuation of an agreement with Dole Philippines weighed on its overall performance. The fruit grower and manufacturer last year ended its contract with RFM to distribute Dole’s package and processed foods products.

“The positive impact of the savings from the lower cost of central warehouse will be felt in the second quarter of the year. Initiatives to improve efficiency selling and marketing budgets are ongoing, and are expected to enhance income for the coming months,” the company said.

Shares in RFM declined by 1.63% or 80 centavos to P4.83 apiece on Monday. -- Arra B. Francia