Amidst consumption slowdown in the economy, food and beverage company
RFM Corporation reported a net income of P100 Million for the first quarter, a 27% decline from the P137.6 Million for the same period last year.

According to RFM President and CEO Joey Concepcion, just like in many companies, margins were affected by the general slowdown in sales, rising commodity prices like wheat, sugar and milk as well as power and utilities cost.  Meanwhile, the company has been tempering the price increases so as not to burden further the consumers and at least keep consumption levels.  This is where past months’ efforts to improve cost structures and operating efficiencies have become useful in partially absorbing the cost shocks, Concepcion added.  

Topline sales managed a minimal 1% growth in the first quarter of the year, ending the period with P1.98 Billion sales revenue, compared to P1.96 Billion last year. Concepcion reported a general softening of the market in many categories as the country’s consumer confidence fell during the first quarter due to rising oil and food prices and the political concerns in the Middle East and North Africa. Reports on consumer confidence showed a decline to minus 23.1% in the first quarter, from minus 8.5% in the fourth quarter of last year due to expectation of increasing interest and inflation rates and rising commodity prices.

Concepcion mentioned that sales were also affected by the pre-booking of stocks by the distributors in the previous months in anticipation of price increases. The
delayed start of summer also slowed down the consumption patterns, but these segments still registered growth due to product innovations, backed by new marketing campaigns, especially in Selecta ice cream, Fiesta pasta, Selecta milk, the new Sunkist Litro and Swift Corned Beef Swak pack.

RFM is optimistic in the coming months as it focuses and leverages on the strengths of its core products.  Selecta Ice Cream, a joint venture with world giant Unilever, is deepening its dominant market position with 66% market share, while the flour-based businesses led by White King Fiesta continues to improve it market position at 29% in the spaghetti pasta category, Concepcion said.