RFM income soars 30% to P149M

Food and beverage firm RFM Corp. posted a net income of P149 million for the first three quarters of the year, an increase of about 30 percent from the P115 million recorded for the same period last year.

In its quarterly disclosure to the Securities and Exchange Commission, RFM said the latest results confirm the direction of the company towards sustainable profitability and growth.

“We are on the way to our third straight year of improving profitability, coming from the turnaround in 2005,” said Jose A. Concepcion III, RFM president and CEO.

Operating income for the first three quarters amounted to P229 million, an increase of 11 percent over the previous period.

The company also reported overall sales growth of 20 percent, hitting total sales of P5.15 billion for the first nine months of the year compared to P4.3 billion for the corresponding period in 2006.

Concepcion 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.

He cited significant sales growth in the first nine months for the company’s Sunkist juice and Selecta Moo milk products, Fiesta spaghetti and Swift corned beef. Also contributing to the strong results were new products launched earlier this year, which included Sunkist high-juice and iced tea in PET bottles, Selecta Moo ice cream, Selecta Choco Craze and fortified filled milk drinks and White King native cake mixes.

At the same time, the company’s operating expenses as a percentage to sales continued to be kept under control, coming in at 19 percent this year as against 20 percent last year. This enabled the group to offset the margin erosion arising from higher costs of raw materials encountered this year, particularly in wheat, skimmed milk powder and other agri-based raw materials.

Earlier the company reported that its board of directors had approved the sale of 766 million treasury shares by way of a follow-on offering slated early next year. RFM is building up its resources to take advantage of market opportunities for its products and to fund other expansion moves for some of its brands as it marks its 50th year next year.