Food and beverage company RFM Corporation reported in a disclosure yesterday to PSE
that it posted an 18% growth in its net income for the first quarter of the year, reaching
P153.7 million, and ahead of its internal target for the period. This was on the back of
around P2.2 billion sales revenue in the first quarter, around 8% lower than last years
P2.4 billion, primarily due to its disposal of the meat business late last year.
RFM likewise disclosed the declaration of a cash dividend of P0.032369 per share,
representing partial (estimated 50%) declaration of 30% of recurring net income for
2012, in accordance with its cash dividend policy. The RFM board approved the
declaration following the recent completion of its audited 2012 financial statement, that
showed RFM finishing the full year with P11 billion in sales, up 6.4% from 2011, and net
income of P682 million, higher by 34% from the previous years level.
For the first quarter, RFM President and CEO Jose A. Concepcion III credited the income
growth to better margins in its core businesses. The lower commodity input costs this
year, such as for sugar and wheat, were important in keeping the cost levels down, as
well as better yields due to scale economies as we reach high levels of production
especially for Selecta ice cream and Fiesta pasta, he said.
With stronger cash flows from its business units and the proceeds from the sale of its
meat business, RFM prepaid its P1.1 Billion long term loans last January, bringing down
its debt ratio to all-time low levels.
Stronger consumption spending is expected as the year progresses with continuous
economic growth, but we expect the impact to be felt more in the second and fourth
quarters. Todate, a number of our consumer products like Sunkist beverage and
segments in our Selecta ice cream and milk, Fiesta pasta, and White King cake mixes and
sauces have already posted encouraging growth. For other product segments, the first
quarter sales seem to be still adjusting from relatively higher trade stocks in the fourth
quarter last year, which experienced rapid growth from aggressive marketing campaigns
compared to previous periods, Concepcion added.
The recent investment upgrade for the Philippines continued to provide further
optimism in both the business and consumer sectors. Fund managers and investors
have also been bullish on the country and several consumer-oriented companies like
For RFM, we remain bullish on the market leadership strength of our core brands
Selecta and Fiesta as we introduce more product innovations and build-up brand
equity, Concepcion said. Moving forward, Concepcion also revealed the companys
intent to accelerate its growth through possible acquisitions and strategic partnerships.