URC profits inch up in 3rd quarter

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WHILE UNIVERSAL Robina Corp. (URC) reported its attributable profit inched up by 1.69% in the third quarter of 2018, the company’s bottomline suffered a double-digit drop in the nine months ending September due to lower operating income and foreign exchange losses.

In a regulatory filing, the Gokongwei-led food and beverage manufacturer posted a net income attributable to the parent of P1.99 billion, higher than the P1.96 billion booked in the same period a year ago.

This brought the company’s attributable profit to P6.80 billion in the January to September period, 19% lower year-on-year. URC blamed the weaker performance to lower operating income alongside foreign exchange losses due to peso depreciation.

“The environment remains to be very challenging with macro-economic pressures especially in the Philippines. The weaker peso and inflation continue to affect our conversion and operating costs thus margins are continuously affected,” URC President and Chief Executive Officer Irwin C. Lee said in a statement.

The company’s revenues for the third quarter meanwhile went up 1.48% to P31.15 billion, pushing the nine-month figure to P95.53 billion, 3.37% higher from the same period a year ago.

URC operates under three segments, namely branded consumer foods, agro-industrial, and commodity foods.

For branded consumer goods, sales of goods and services inched up by 1.7% to P76.17 billion. Sales from domestic operations were flat at P43.44 billion, as lower volumes in the coffee category dampened the growth in noodles, biscuits, and ready to drink beverages.

International operations posted a 4.8% increase to P32.73 billion, but slid in dollar terms by 0.3% to $623 million. Operations in Vietnam and Australia boosted the company’s performance, while Malaysia and Indonesia also contributed to the sales of snacks and chocolates.

The agro-industrial segment grew by 13.8% to P8.46 billion during the period, following higher average sales prices of dog food, hog feeds, and game fowl feeds, complemented by higher selling prices of hogs.

Meanwhile, the commodity foods segment rose 7.6% to P9.76 billion. URC attributed the increase to the flour business which grew 13% due to higher volumes and selling prices, as well as the sugar business which increased 3.3% following higher volumes of refined sugar and a rise in selling prices of raw sugar.

URC’s net foreign exchange losses reached P244 million for the first three quarters of the year, due to combined effects of international subsidiaries’ local currencies and the Philippine peso versus the dollar.

The company also recorded P91 million worth of equity in net losses from joint ventures, lower than the previous year’s P207 million. This was due to lower losses from Calbee-URC, Inc. (CURC).

URC recently bought out two of its international partners from separate joint ventures, namely Calbee, Inc. for CURC and ConAgra Grocery Products Company, LLC for Hunt-Universal Robina Corp. The company will keep licensing agreements for the products under the partnerships.

“We will be proactive and look for opportunities to manage our portfolio better and implement plans and programs to mitigate the effects to our topline and bottomline in the near term,” Mr. Lee said.

Shares in URC fell 7.14% or P10 to close at P130 each at the stock exchange on Thursday. — Arra B. Francia