Corporate News

By Franz J. G. de la Fuente, Reporter

Pepsi reports flat Q3 profit growth

Posted on November 12, 2012

LISTED Pepsi-Cola Products Philippines, Inc. posted flat third-quarter profits versus year-ago levels, anchored on a seasonally weak quarter coupled with the impact of heavy rains in July and August despite an uptick in net sales.

The beverage manufacturer realized a July-to-September net income of P119.34 million, barely changed from last year’s P118.18 million, reflecting a typically weak period for beverage firms, a filing with the Philippine Stock Exchange (PSE) showed on Friday.

“The third quarter of the year is typically a difficult period for the beverage industry due to seasonality. This year it was further compounded by the heavy rains of July and August. But our notable achievements across brands and categories were driven by a better-than-expected performance in carbonated soft drinks, particularly in the cola segment,” Partho Chakrabarti, Pepsi-Cola Products Philippines president, said in a statement released over the weekend.

Net sales for the three-month period rose by 7.16% to P4.49 billion from P4.19 billion, year on year, while cost of goods sold expanded by 5.36% to P3.34 billion versus P3.17 billion in the same period last year.

Pepsi-Cola Products Philippines’ third-quarter results brought its nine-month net income to P696.84 million, up 208.57% from P225.83 million in the same period last year, while net sales increased by 12.58% to P14.23 billion versus P12.64 billion, year on year. Nine-month cost of goods sold grew by 4.73% to P10.40 billion from P9.93 billion in year-ago levels.

The company said that its robust sales growth so far will allow it to maintain improved profitability for the remainder of the year. Pepsi earlier posted a 15.27% net sales growth to P9.74 billion in the first semester, year on year.

“The company’s top-line growth continues to outperform industry growth for yet another quarter and the company positively expects to maintain higher profitability throughout 2012 from continued efforts to drive top-line growth, lower sugar prices, increased marketing efforts, maintaining tight cost control and industry growth,” Pepsi-Cola Products Philippines said in its end-September financial statement.

Pepsi-Cola Products Philippines was incorporated in 1989, and is engaged in the manufacturing, sale and distribution of carbonated soft drinks and non-carbonated beverages to retail, wholesale, restaurants and bar trades, according to data posted on the PSE Web site.

It is co-owned by United States-based beverage giant PepsiCo, Inc. and Lotte Chilsung Beverage Co. Ltd., one of South Korea’s biggest beverage firms.

At present, the firm’s 11 plants in the country serve at least 440,000 outlets nationwide, according to its latest financial statement.

Pepsi-Cola Products Philippines told BusinessWorld last January that it has allotted $75 million for capital expenditures this year to expand its beverage distribution operations and to finance maintenance works on its plants.

The company’s shares were traded at P5.60 apiece last Friday, unchanged from Thursday’s close.