RFM profit up 8% to P67.3M in first quarter

Food and beverage firm RFM Corp. managed to post a 7.6 percent rise in its net profit from January to March this year despite difficult business conditions.

In a statement, RFM said its net income grew to P67.3 million compared with P62.6 million a year earlier.

Robbie Azcarate, RFM senior vice president and chief financial officer, attributed the income growth to higher sales volume helped by “calibrated price increases across the various food and beverage categories to cover cost increases.”

He said the implementation of better plant efficiencies and cost management likewise “served to temper the adverse consequence of rising costs of domestic raw materials, freight and handling, utilities, and wages.”

He added RFM was able to contain operating expenses like selling and marketing expenses, which helped in sustaining net income performance.

While food and beverage revenues grew year-on-year, the consolidated revenues of P1.6 billion in the first quarter was six percent lower than the P1.7 billion for the same period last year due to the slowdown in other businesses.

Last year, RFM reported a 15.6 percent growth in net profit due to the successful launch of its new products and cost-reduction measures implemented.

Consolidated sales rose 13.8 percent to P6.99 billion P6.14 billion in 2006 as the company focused on fewer but stronger products.

RFM president and chief executive officer Jose Concepcion III earlier said the key to reaching RFM’s income objectives were the introduction of higher value and innovative products that banked on the RFM brands’ respective positioning in the market.

Concepcion said the firm’s flour division likewise contributed to the significant growth in net income. The flour division has exhibited healthy growth despite the serious wheat market situation due to better plant efficiencies and cost management.

Among the products launched last year include Selecta Moo’s richer chocolate drink product and basic fortified milk, Sunkist’s Hi-Juice beverages and iced-tea drinks in attractive and convenient plastic bottles, new sizes and packaging of its Fiesta pasta and Rica Protina hotdogs.

Selecta, an ice cream business jointly owned by RFM and Unilever, has expanded its whole ice cream category which further strengthened its leadership in the industry.