UNIVERSAL Robina Corp. (URC)’s attributable profit fell by 12% in the first quarter of 2018, as lower coffee volume, higher inflation, and the continued depreciation of the peso dragged down its operations in the Philippines.
In a regulatory filing on Monday, the Gokongwei-led food and beverage manufacturer reported a net income attributable to the parent of P2.95 billion in the January to March period, lower than the P3.37 billion it booked in the same period a year ago.
Revenues grew by 1.6% to P31.2 billion, driven by the international operation of its branded consumer foods (BCF) segment. The international arm improved its sales by 9.6% to P10.8 billion for the quarter, or 6.5% to $209 million in terms of US dollars.
“Top-line growth came from Vietnam, Malaysia, and SBA (snack brands Australia). Vietnam is still on its path to recovery with C2 and Rong Do showing continued momentum, as well as biscuits and candies both registering strong performance,” the company said.
The local market, meanwhile, was met with headwinds for the quarter, as net sales slowed by 4.6% to P14.3 billion. URC attributed the decline to the underperformance of snacks and total beverages, as well as lower volumes in the coffee category.
The BCF segment accounted for 80.5% of URC’s consolidated sale of goods and services for the quarter. URC’s two other businesses, namely the agro-industrial food group and commodity foods group, contributed the remaining 19.5%.
The agro-industrial arm picked up by 11.2% to P2.6 billion for the quarter, fueled by higher sales of dog food and hog feeds. The company also benefited from its strategy of shifting to value-added products.
The commodity foods group contributed P3.1 billion in sales for the period, 2.6% lower year on year following lower sugar volumes alongside lower prices of raw and refined sugar. The flour business, meanwhile, saw a 4.4% increase given higher volumes and price of pasta.
With the decline in earnings, URC’s gross profit market went down by 91 basis points to 31.2% for the quarter, versus 32.1% in the same period in 2017.
This year, the company has allocated P8 billion in capital expenditures to support the expansion of capacities as well as to improve handling and distribution.
URC is bringing in new management starting May 14, after announcing last week that it has tapped former Procter and Gamble executive Irwin C. Lee as its new chief executive officer, president and director.
Mr. Lee’s appointment marks the first time that a non-Gokongwei family member will lead the firm. Mr. Lee will replace Lance Y. Gokongwei, who will now take on the position of chairman.
URC is the consumer arm of JG Summit Holdings, Inc., which also has core interests in air transportation, property development and hotel management, banking, and petrochemicals.
Shares in URC went up 1.59% or P2.20 to close at P140.50 each at the Philippine Stock Exchange on Monday. — Arra B. Francia