WASHINGTON: Universal Robina Corporation (URC), the food and beverage arm of the Gokongwei group, reported that its net income for the first three months of fiscal year 2016 (beginning October 2015 and ending September 2016) surged 47.3 percent to P4.79 billion.
In a disclosure to the Philippine Stock Exchange, URC said the sharp hike in profits came on the back of unrealized foreign exchange gains and market valuation of financial assets, mainly from the gain of Griffins debt currency forward hedge.
URC continues to be in a net debt position of P6.47 billion with a financial gearing ratio of 0.42 as the company continues to hold the long term debt used for the Griffins acquisition.
The firm reported an 11.3 percent sales growth for the first three months of fiscal year 2016 with net sales amounting to P29.99 billion, mainly driven by branded foods and complemented by sugar, renewables (bioethanol and biomass cogen (co-generation) power) and feeds.
URC’s Philippine branded consumer foods (BCF) business increased sales by 5.8 percent while International branded consumer foods recorded a 19.2 percent growth. The BCF international sales has a lower base of 45 days for Griffins last year compared to 90 days for the quarter).
“Sales of our non-branded consumer foods group increased by 16.6 percent for the first three months of fiscal year 2016 driven by the contribution of sugar, renewables and feeds which grew 72.8 percent and 22.7 percent, respectively,” URC said.
URC’s operating income was at P5.14 billion for the first three months of fiscal year 2016, 16.1 percent higher than the P4.43 billion posted in the prior year as lower input prices (palm oil, creamer, robusta bean, PET resin) and better cost management resulted in margin expansion for branded foods.
Its BCF group, including the packaging division, increased sales by 10.3 percent to P24.99 billion for the first three months of fiscal year 2016 from the P22.67 billion posted in the prior year.
BCF Philippines recorded modest sales growth to P15.7 billion from P14.84 billion in the prior year. Sales was muted due to a relatively tougher comparable versus last year, a consequence of the change in the mix of its coffee business with the shift to value for money offering of twin pack with lower selling prices.
“We are still experiencing the effect of El Niño showing minimal growth in Mindanao area and wholesaler accounts which covers traditional sari-sari stores,” URC adding that “aggressive moves of competitors to recover or gain market shares was felt across all categories especially on snackfoods and coffee.”
Beverage remains to be the main driver for growth while the domestic business showed mixed results with Chocolates and Noodles growing double digits while snacks, bakery and candies at low single digits.
URC’s International BCF business registered sales of P8.985 billion for the first three months of fiscal year 2016, a 19.2 percent increase. Vietnam, Indonesia and New Zealand contributed to the strong top-line growth while Thailand was down 2.3 percent due to lower sales of biscuits.
The non-branded consumer foods business, commodity foods group and agro-industrial group, posted revenues of P4.99 billion, an increase of 16.6 percent against last year mainly due to the contribution of its renewable business and feeds.
URC’s flour business was flat due to slightly lower sales volume. Feeds growing 22.7 percent coming from higher sales volume but this was offset by slower growth of Farms as a consequence of lower demand and selling prices.