RFM sustains turnaround with 45% profit growth

Higher sales and continuing cost-cutting measures boosted the net profit of Concepcion-owned food and beverage conglomerate RFM Corp. by 45 percent in the nine months ending September this year.

In a financial report filed with the Philippine Stock Exchange, RFM said it sutained its turnaround as its net profit reached P68 million during the period, higher than P47 million a year ago.

Consolidated revenues rose nine percent to P4.5 billion from P4.1 billion a year earlier, mainly driven by the increase in sales of flour, ice cream, juices and its property development projects.

Cost of sales amounted to P3.42 billion, 10.8 percent higher than the previous year’s P3.09 billion. Other charges increased by 75.29 percent to P149 million from only P85 million, mainly as a result of the write-down of cold storage asset.

Operating income, on the other hand, grew 65 percent to P246 million from the year earlier figure. RFM said it expects to sustain its operating income on account of margin improvement initiatives and more prudent spending as it rolls out new high volume products for the mass market to prepare the company for the next stage.

Brands under the RFM umbrella include Sunkist Juice, Selecta Milk, Swift processed meat, White King Flour, and Fiesta Spaghetti.

Last year, RFM incurred a P436 million net loss, slightly down from the P455 million loss in 2003. This was due largely to a one-time asset impairment charge of P556 million in 2004 that the company decided to take on its investment in preferred shares of Swift Foods Inc. (SFI) in compliance with new International Accounting Standards (IAS).

SFI, an integrated chicken producer which used to be a subsidiary of RFM, incurred losses in 2004 as the poultry industry continued to suffer in the wake of the bird flu scare and the influx of chicken imports.

RFM’s net sales for 2004 remained flat at P5.85 billion as against P5.75 billion as the company reviewed and reconfigured its multiple product lines in a bid to lower production costs and discontinue marginal products.

RFM pioneered flour milling in 1957 and since then has grown into a highly diversified food and beverage company with products such as flour, feeds, poultry, processed and canned meat, fruit juices and snack foods.

It is a company involved in a variety of activities including flour milling, food processing, animal husbandry, animal feedmeal production, and the marketing and distribution of grocery products. RFM also produces ice cream under the Selecta brand.