GOKONGWEI-LED Universal Robina Corp. (URC) expanded its attributable profit by 12% in the second quarter of 2019, boosted by the strong performance of its local coffee business led by Great Taste.
In a regulatory filing, the listed food and beverage firm said net income attributable to the parent stood at P2.09 billion from April to June, higher than the P1.86 billion it recorded in the same period a year ago.
This came after a three percent increase in sales to P33.72 billion.
On a six-month basis, URC’s attributable profit went up 6.6% to P5.13 billion, as sales improved 5.6% to P67.04 billion.
URC’s business is divided into three segments, namely branded consumer foods, agro-industrial group, and commodity foods group.
The branded consumer foods segment, which accounts for bulk of the company’s revenues, increased by four percent to P52.26 billion, as higher sales from the domestic business offset the slight decline from its international operations. Among its products include Jack ’n Jill snacks, C2 tea drinks, and Payless instant noodles.
“We pleased that our top strategic priority to pivot our Philippines branded consumer foods division back to strong growth continues to be on track,” URC President and Chief Executive Officer Irwin C. Lee said in a statement.
“The route-to-market and product supply chain transformation programs we identified and addressed the past year have started to bear fruit; but we need to continue our focus on perfect execution.”
The company earlier implemented initiatives to improve its coffee business in the country, which has been a major drag to earnings in previous years.
Domestic sales went up by 9.8% to P31.23 billion, thanks to a double-digit increase in its coffee, snacks, and joint venture businesses. Meanwhile, international sales dropped 3.8% to P20.28 billion, weighed down by Thailand’s sluggish performance and forex devaluations in New Zealand and Australia.
For the agro-industrial group, sales jumped 20.3% to P6.59 billion, driven by higher volumes and selling prices from its feeds business.
The commodity foods group saw a 4.8% decline in sales to P8.19 billion, as the sugar business went down by 14.7% due to the phasing of sugar volumes in the first half. Its renewables and flour businesses were up by 3.6% and 18.7%, respectively, due to strong volumes during the period.
URC is tracking a seven to nine percent increase in sales for the year, counting on the recovery of its coffee business as well as the growth of its other food and agro-industrial businesses. Its bottom line is also seen to grow at the same pace.
The company allotted P9.1 billion in capital expenditures for the year to expand its capacity.
Shares in URC jumped 2.76% or P4.40 to close at P164 each at the stock exchange on Thursday. — Arra B. Francia