RFM Corp. net income soars 69% to P115M in first nine months

RFM Corp., a food and beverage conglomerate owned by the Concepcion family, reported a 69 percent growth in its net profit in the first nine months of the year to P115 million from P68 million the previous year period.

RFM attributed the positive trend to the continuing strong performance of its flour, baked goods and ice cream businesses, as well as to the cost-containment and margin-improvement contributions of its milk, juice, meat and other businesses.

Consolidated net sales, however, remained flat due to the adverse effects of super typhoon ‘Milenyo’ in the third quarter, especially in the company’s ice cream, chilled meat and other products requiring steady power for cold storage and distribution.

RFM said it also continued to replace marginal niche products with fewer but better-margin mass-market products.

The conglomerate is optimistic it would sustain its gains for the rest of the year as it continues its drive towards manufacturing affordable quality food and beverage products for the mass market.

RFM is developing more new products within the reach of the broader income classes who put priority on getting value-for-money from their daily food purchases.

In line with this thrust, RFM launched last month what it calls the "people’ s milk," Selecta Fortified Filled Milk, which is fast gaining overwhelming market acceptance for its exceptionally good taste and reasonable price.

The ready-to-drink milk, which contains all the nutrients of milk in a high-protection aseptic package, is said to be more economical than the equivalent glass of milk made from powdered milk.

RFM plans to raise as much as P500 million from debt and equity until next year to raise funds for the development of new products intended for the mass market and the acquisition of new manufacturing equipment.

The company will create a new class of shares or up to 32 million in "convertible preferred class B shares," equivalent to about P304 million. The preferred B shares will be convertible to 380 million common treasury shares with a fixed dividend rate of 10 percent a year based on the offer price.

RFM also makes and markets Fiesta pasta and White King flour mixes, ready-to-drink Sunkist juice and tea, Swift processed and canned meats, and Selecta ice cream in joint venture with Unilever.