UNIVERSAL Robina Corp. (URC) saw its net income attributable to equity holders of the parent slide 15% to P9.2 billion in 2018, which was attributed to lower operating income, higher net finance costs, and foreign exchange losses.

In a regulatory filing, the Gokongwei-led food manufacturing giant posted a 2% rise in consolidated sales to P127.8 billion last year, “driven by its Agro-Industrial & Commodities (AIC) divisions, the recovery in Vietnam, and consistent performance of Australia.”

URC’s branded consumer foods segment dipped 0.8% to P101 billion, dragged by a 2% decline in domestic sales to P57.81 billion due to a slump in coffee volume. International sales, on the other hand, went up by 0.8% to P43.2 billion fueled by a recovery in Vietnam sales and sustained growth in Australia that offset “restructuring related declines in New Zealand and Myanmar.”

Branded consumer foods sales accounted for 79% of total URC sales last year.

The AIC segment showed 16% increase in sales to P11.69 billion, driven by growth in feeds and farms businesses.

For the commodity foods segment, URC recorded 15% rise in sales to P13.53 billion, thanks to growth from its flour, sugar and renewables businesses.

Cost of sales jumped 5.4% to P90.332 billion, “due to higher sales and higher costs of commodities and other raw and packaging materials.”

URC said its operating income fell by 10.5% to P13.381 billion in 2018 from P14.952 billion reported in 2017.

Finance costs went up by 16.4%, to P1.662 billion, as URC saw a higher level of trust receipts payable and short-term debt, as well as rising interest rates.

Also, net foreign exchange losses reached P175 million in 2018, a reversal of the P154-million gain in 2017, “due to the combined effects of appreciation of international subsidiaries’ local currencies against US dollar, particularly NZ dollar, and depreciation of Philippine peso against US dollar.”

“We have set strategies that will pivot the business back to achieving sustainable growth. Executing our transformation programs well will be key to deliver a step change in our performance in 2019 and beyond,” URC President and CEO Irwin C. Lee was quoted as saying in a statement.

Shares in URC fell 3.57% or P5.60 to close at P151.40 each on Monday.

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