CENTURY PACIFIC Food Inc. (CNPF), the maker of Century Tuna, reported a 7% drop in earnings in the third quarter despite double-digit sales growth.

In a regulatory filing, the country’s largest canned food company said its net income fell to P743.72 million during the July to September period, from P797.91 million during the same period a year ago.

This brought its nine-month net income to P2.21 billion, 2% up from P2.16 billion during the same period a year ago.

“This was driven primarily by sustained double-digit growth in its branded consumer food business and a continued recovery in its OEM export segment. The Company, however, saw continued input price pressures which compressed profit margins compared to the same period last year,” the company said.

CNPF’s revenues jumped 16% to P9.29 billion in the July to September period, fueled by an 11% growth in sales of food products under Argentina, 555 and Birch Tree labels, to P6.4 billion, and a 30% rise in its OEM (original equipment manufacturer) business. For its OEM business, CNPF manufactures canned tuna sold under other retailers’ brands.

For the nine-month period, sales rose 21% to P25.46 billion, driven by an 12% increase in branded food sales to P18 billion, and more than 45% rise in OEM exports to P7.3 billion.

“We continue to see healthy revenue growth despite our higher base during the third quarter of last year. Branded food in particular continues to be driven by increases in sales volume across all segments — Marine, Meat, and Milk. OEM on the other hand saw a combination of higher volumes and higher average selling price, as global demand for both tuna and coconut remains strong and as we diversify into higher value products,” CNPF Chief Finance Officer Oscar A. Pobre was quoted in a statement as saying.

The company’s expenses grew by 20% to P8.32 billion during the third quarter, and by 24% to P22.47 billion during the January to September period.

“We continue to encounter elevated raw material prices and headwinds on our profitability metrics which are likely to remain up to middle of next year. Despite these challenges which we believe are cyclical in nature, we remain focused on delivering the Company’s strategy of sustainable earnings growth over a longer time period,” Mr. Pobre said. — CRAG