RFM earnings rise 6.6% on strong flour sales

Food and beverage firm RFM Corp. posted a net profit of P161 million in the nine months ending September this year, up 6.6 percent from the same period a year ago.

In a financial report filed with securities regulators, RFM said net sales rose 8.3 percent to P5.6 billion due to the continuing strong performance of its flour group, which posted growth of 32 percent.

The flour business earned P3.2 billion while the beverage and meat group reported a 8.5-percent hike in net earnings to P1.1 billion.

RFM said higher sales volume and better selling prices in its food and beverage categories also resulted to improved revenues.

Operating expenses were tightly managed and kept within 17.3 percent of net sales, lower than the 19.1-percent level during the previous year, which further helped in sustaining net income performance.

Jose Concepcion III, president and chief executive officer of RFM, said the launch of products targeting the mass market also boosted the conglomerate’s revenues.

“In these difficult times, RFM has centered its efforts on developing quality products that would still be affordable for the mass market,” Concepcion said.

New products such as Vitwater, low fat and choco versions of fortified milk, swift luncheon meat and chicken franks, as well as new packaging formats of Sunkist juices were well received by the consuming market.

These improvements, however, were still not sufficient to offset the rising costs of imported and domestic raw materials, freight and handling, utilities and wages. Gross margins fell slightly from 23.6 percent in the third quarter of 2007 to 22.5 percent this year.

In the third quarter alone, RFM reported a net income of P26.7 million, 4.9 percent higher than the P25.5 million recorded a year earlier on the back of a 29.6 percent jump in revenues from P1.6 billion to P2.1 billion. – Zinnia Dela Peña