Earnings of Gokongwei-led Universal Robina Corp. (URC) grew 6% in the third quarter on lower cost of sales as consumer demand remains lackluster.

In a regulatory filing on Friday, the food company said its attributable net income stood at P1.97 billion for the July-to-September period, owing to better operating income, lower debt and slimmer foreign exchange losses.

Revenues dipped 1% to P32.37 billion, but gross profits increased 4% to P10.14 billion because of a 3% reduction in costs to P22.22 billion.

For the first nine months of 2020, URC’s attributable net income increased 7% to P7.5 billion. Sale of goods services was flat at P99.77 billion, while cost of sales slid 1% to P69.16 billion.

“The current environment continue to pose severe challenges to the business. Weaker consumer sentiment and slowing retail sales in Q3, plus sluggish macroeconomic fundamentals, are weighing on a slower path to market recovery,” URC President and CEO Irwin C. Lee said in a statement.

During the nine-month period, sales from the company’s consumer food segment fell 2% to P76.57 billion, which was linked to the economic slowdown in several ASEAN markets due to the pandemic.

The agro-industrial business also declined 7% to P9.22 billion sales because of downsized operations. Only the commodity foods group posted an improvement, as sales from this segment grew 25% to P13.12 billion.

“Despite these challenges, we remain focused on operational excellence, business transformation, and investing in building stronger brands and innovation to fuel growth. This focus is helping us perform ahead of market trends,” Mr. Lee said.

“More importantly, this enables us to continue supporting and partnering with our customer and suppliers to serve the needs of our consumers and communities in this time of crisis.”

URC has P15.9 billion of cash balance as of end-September, with net debt down P8.3 billion year-on-year to P20.9 billion. It has so far spent nearly P300 million for coronavirus pandemic-related efforts.

Shares in URC at the stock exchange closed at P141.70 each on Friday, up P1.70 or 1.21%. — Denise A. Valdez