URC profit hit by sharp drop in forex gains
UNIVERSAL Robina Corp. (URC)’s attributable profit dropped by more than a third during the second quarter, taking a hit from the weaker peso, with currency depreciation also affecting its international subsidiaries, as well as setbacks at its domestic coffee business.
In a regulatory filing, the food and beverage company reported a net profit attributable to equity holders of the parent of P1.86 billion, down 35% from a year earlier.
In the six months to June, URC’s attributable profit fell 23% to P4.81 billion.
The listed firm said operating income and foreign exchange gains declined. URC said net foreign exchange gains declined by 77% “due to the combined effects of depreciation of international subsidiaries’ local currencies and Philippine peso vis-a-vis the US dollar.”
URC also noted a decrease in coffee volumes, coupled with higher selling and distribution expenses.
Revenue meanwhile rose 10% to P33.18 billion during the second quarter. In the first six months they rose 5.89% to P64.37 billion.
“We are pleased with our overall sales growth momentum, and are working hard to address the short-term challenges to profitability brought about by peso devaluation and inflationary pressures,” URC President and Chief Executive Officer Irwin C. Lee said in a statement.
The company has three core businesses — branded consumer foods (BCF), agro-industrial products, and commodity food products.
The BCF segment saw a 2% increase in sales from the domestic and international business to P50.4 billion. Revenue posted by the domestic business fell 2%, weighed down by coffee.
Meanwhile, revenue posted by the international business rose 8% to P21 billion, following the recovery of its Vietnam operations alongside growth in Indonesia and Australia.
The agro-industrial products and commodity food products generated combined sales of P13.2 billion, up 22% year-on-year, after higher volumes in sugar, flour and feeds, and better selling prices for hogs.
URC is planning to make P8 billion in capital expenditures this year, to support the expansion of capacity and to improve handling and distribution.
The company is also banking on a number of improvements to transform its business.
“These include developing a people and planet friendly culture that will in turn enable product supply chain transformations, preferred partnerships with customers and suppliers, and a portfolio of innovations to deliver products and brands that consumers love,” Mr. Lee said.
URC rose 3.82% or P5 to P136 on Monday. — Arra B. Francia