SEC rejects Cosmos bid to lift suspension order

The Securities and Exchange Commission (SEC) has thumbed down Cosmos Bottling Corp.’s request to lift an order suspending its registration statement.

SEC sources said Cosmos failed to come up with a satisfactory explation that would merit the lifting of the suspension order.

The suspension was triggered by the softdrink firm’s failure to submit its annual financial report for 2005.

With the revocation of Cosmos’ registration statement, its shares cannot be traded on the stock exchange.

Cosmos was listed on the Philippine Stock Exchange in December 1994. The first softdrink manufacturer in the country, it is now owned by The Coca-Cola Co. following the purchase by the latter of the shareholdings of San Miguel Corp. in Coca-Cola Bottlers Philippines Inc. and its assets and subsidiaries.

The company was originally established as Manila Aerated Water Factory engaged in the manufacturing, marketing and distribution of softdrinks.

Among Cosmos’ branded products include Pop Cola, Sarsi, Cheers Lemon, Orange and Ruby, Jaz Cola and Sparkle. These products are manufactured using a combination of imported and locally produced ingredients. Sarsi and Sarsi Light are directed at the Class A and B markets while Pop, Jaz, Sparkle and Cheers brands are primarily marketed to the Class C and D population segments.

Based on its annual financial statements for 2006, Cosmos maintains 31 active sales offices and operates six company-owned manufacturing plants strategically located in Luzon and the Visayas.

The tough carbonated softdrinks industry market marked by diminishing consumer spending, heightened trade competition and the influx of alternative drinks and juices had shaped the company’s operating performance for 2006.

Consolidated net sales slightly went up to P9.46 billion in 2006 from P9.33 billion the previous year despite lower sales volume.  This was due to the impact of the price increases implemented in 2005 and 2006.

Cost of sales likewise increased 11 percent to P7.54 billion from P6.7 billion mainly due to increases in sugar price, tolling fees and cost of packaging materials. This resulted to a 25 percent drop in gross profit to P1.92 billion.