RFM income rises 5% to P245 million in 2008

MANILA, Philippines - RFM Corp., the food and beverage concern of the Concepcion family, reported a five percent gain in its net income last year despite a softening in consumer spending due to the global financial downturn.

In a financial report filed with securities regulators, RFM said its net earnings reached P245 million in 2008 from P234 million the previous year on the back of a strong 23 percent growth in sales.

RFM president and chief executive officer Jose Concepcion III attributed the higher income to successful cost-containment measures, steady double-digit growth in sales from its branded food business and the launch of more affordable and innovative products.

“We don’t seem to see any sign of recession. RFM sustained its profitability through various cost reduction measures and stronger sales from our branded food group and this has led to a larger absolute margin base,” Concepcion said.

RFM focused on its branded consumer products, driving consolidated net sales to P7.5 billion or 22.95 percent more than the year earlier figure of P6.1 billion.

“Stronger sales, ranging from 30 percent to over 60 percent growth rates, were achieved by the branded food and beverage businesses,” Concepcion pointed out.

Sales of beverage products increased with the launching of more Sunkist juice and iced-tea flavors in more convenient PET bottles. The launch of Vitwater as a first-mover in the vitamin-enriched water category also significantly contributed to the growth with very strong consumer acceptance.

 Meanwhile, Selecta milk growth was led by the Fortified milk product lines which expanded by 80 percent.

Concepcion said sales from its chicken and meat products also improved. This was complemented by huge growth in Fiesta pasta sales which are now coming out from the firm’s new and modern pasta plant in Pasig.

The sustained growth has made Fiesta the national market leader in spaghetti as of yearend, he added.

“We expect the growth momentum to continue as we approach the stronger months and as we put more marketing support in building our brands,” Concepcion noted.

Selecta, RFM’s ice cream joint venture with Unilever, likewise posted an impressive double-digit sales growth for the third consecutive year with the successful launch of Family Pack, Supreme and Limited Edition. It holds a commanding 54 percent share of the country’s ice cream market.

“Since we bought the Selecta brand 20 years ago, it has steadily grown to become the number one ice cream brand in the country today. Our successful joint venture partnership with Unilever has helped strengthen our position in the market, and this was complemented by the entrepreneurial team of Selecta led by my brother John,” Concepcion said.

Ice cream exports also grew, driven by volumes from the Middle East market.

For his part, RFM executive vice president and chief operating officer Felicisimo Nacino Jr. said: “Moving forward, RFM shall continue with its efforts to bring greater value to consumers with more product innovations at affordable prices, coupled with strategic brand-building programs, as it continues to keep watch on its productivity levels and cost structure amidst the volatile raw materials market.”