URC’s food business seen to sustain its growth on seasonal consumer spending
ANALYSTS expect the food business of Universal Robina Corp. (URC) to further pick up in the last quarter of the year as they await higher consumer spending due to seasonal demand.
“In the remaining months of the year, we see URC’s business segments to continue flourishing amid the Christmastide as consumers will open up their wallets for the holiday shopping spree,” Regina Capital Development Corp. Head of Sales Luis A. Limlingan said in a Viber message.
Separately, Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said “the typical peak in sales for many businesses is in the fourth quarter, especially during the holiday season towards the end of the year.”
“So, overall business [is expected] to further improve as there are no more lockdowns so far in 2022,” he added.
Their comments come after URC on Friday released its third-quarter financial report. Recovery of consumer spending and strategic cost-cutting measures have boosted URC’s sales, according to analysts.
“URC’s third-quarter results beat consensus estimates. Sales were strong as consumer spending patterns normalized,” AB Capital Securities, Inc. Vice-President Jovis A. Vistan said in a Viber message.
He added: “Profits were also strong as sales growth was accompanied by saving measures.”
Mr. Limlingan said “the food manufacturer logged impressive earnings in the third quarter and was well above our estimates.”
“The robust growth in its sales was mainly driven by the upbeat performance of its branded consumer foods business line, and the firm’s management was able to weather the storm by their strategic cost adjustments as well as its cost-cutting measures,” Mr. Limlingan said.
Mr. Ricafort noted that more consumers have better incomes or livelihoods compared with a year or two years ago — factors which he said support “the further pickup in consumer spending, which accounts for nearly 70% of the economy.”
In the third quarter, URC’s attributable income amounted to P3.15 billion, up by 27.4% from P2.47 billion in the same period last year.
Its topline grew by 31.7% to P36.77 billion in the third quarter from the P27.92 billion recorded in the same period in 2021.
URC manufactures and distributes branded consumer foods. It is also into hogs and poultry production, animal feeds and veterinary products, flour milling, and sugar milling and refining.
On Friday, its shares jumped by 5.68% or P6.80 to close at P126.60 apiece. — Justine Irish D. Tabile