Universal Robina profit up 76% on FX gains

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FOOD and beverage manufacturer Universal Robina Corp. tempers costs and enhances category mix. — URC.COM

EARNINGS of Universal Robina Corp. (URC) grew 76% in the second quarter due to foreign exchange gains despite flat revenues.

In a statement over the weekend, the food and beverage manufacturer said its net income stood at P3.8 billion during the April-to-June period, as operating income increased 16% to P4.3 billion.

The company said the improvement could be linked to its efforts in enhancing category mix and tempering costs when the government imposed a lockdown to contain the coronavirus outbreak.

Net sales managed to climb 1% to P34 billion. While consumers were locked in homes, select products saw increased demand, namely: snacks, noodles, powdered drinks, animal feeds, flour and sugar. This offset the decline in candies and ready-to-drink beverages.

For the six months starting January, URC’s net income stood 13% higher at P6 billion, driven by the 8% climb in operating income to P8.2 billion. Net sales ended at P67.4 billion, slightly up from the P67.04 billion it reported in the same period last year.

By business segment, branded consumer foods booked P50.9 billion in sales, reflecting a 2% growth in domestic sales and a 3% decline in international sales.

The drop in international figures can be traced to pandemic-related challenges in Indochina during the first quarter. But this started to improve in the second quarter because of increased sales in Oceania.

Sales from agro-industrial and commodities businesses rose 13% to P16.5 billion. This came mostly from the commodities foods group, the sugar and renewables group, and the flour group, which grew 26%, 31% and 12%, respectively.

“[W]e are motivated by the fact that business results in the first half turned out better than our severe lockdown forecasts,” URC President and CEO Irwin C. Lee said in the statement.

“While we may have weathered the first wave of this crisis, we must continue securing the here and now, while also preparing for the recovery efforts for the balance of the year and beyond,” he added.

URC has P18.7 billion of cash as of June, and its net debt has been reduced by P11.5 billion year on year, to P17.1 billion.

Shares in URC at the stock exchange shed P2 or 1.61% to P122.40 each on Thursday. — Denise A. Valdez