Pepsi earnings up 15.3% to P1B
Pepsi-Cola Products Philippines Inc., the country’s second largest softdrinks firm, said its net earnings grew 15.3 percent in its fiscal year ending June to P1 billion due to higher sales volume.
Pepsi said net sales increased 7.5 percent to P12.92 billion from P11 billion as sales volume rose 10.7 percent from 120 million cases to 133 million cases.
Sales of carbonated beverages went up 9.6 percent from 110 million cases to 120 million cases, reflecting an increase of approximately two percent in Pepsi’s market share. This was attributed to the 6.1-percent increase in selling prices to offset the impact of cost increases and a price rise subsequent to the increase in the rate of value-added tax (VAT) from 10 percent to 12 percent in February 2006.
Sales of non-carbonated beverages, on the other hand, jumped 22 percent from 10 million to 12 million cases, fueled by the company’s continuing geographical expansion.
Cost of goods sold increased to P8.76 million from P7.25 million due to higher raw material costs, particularly sugar. The average price of sugar went up from P22,980 per ton to P26,273 per ton in fiscal year 2007, or an increase of approximately 14.3 percent.
Pepsi is hoping to raise as much as P7.9 billion from a primary and secondary offering of up to 1.14 billion shares at a maximum offer price of P6.04 each share with an over-allotment option of 171.35 million shares.
Of the 1.14 billion shares, up to 380.78 million will be issued through an initial public offering (IPO) while 761.565 million will be sold by existing shareholders, namely Guoco Assets (Phils) Inc. and the Nassim Fund.
The Hong Kong-listed Guoco Group, a member of the Hong Kong Group of
UBS Investment Bank has been appointed as sole international underwriter and bookrunner for the issue. The company has not selected any underwriter yet for the domestic offering.
The company has set aside 799.64 million shares for the international offering while up to 342.7 million shares have been reserved for local investors.
Of the expected P6.9-billion proceeds (exclusive of the greenshoe option), the company is estimated to receive about P2.3 billion, which will be used to fund its expansion.
Pepsi intends to install additional bottling lines to beef up capacity and allow it to manufacture non-carbonated beverages and launch new products. Other proceeds from the offering will be used to fund general corporate purposes.
The company has earmarked P2.15 billion for its capital expenditures this year.
Pepsi-Cola Philippines’ portfolio of products includes cola and flavored carbonated beverages, including low-calorie derivatives as well as juices, iced teas, sports drinks and energy drinks. Its brands include Pepsi, Diet Pepsi, Pepsi Light, Pepsi Max, 7Up, Mountain Dew, Gatorade, Lipton Iced Tea, Tropicana, Propel and Sting.
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