RFM profit soars 86% in 9 months

MANILA, Philippines - Food and beverage conglomerate RFM Corp. said its net profit soared 86 percent in the first nine months of the year to P523.6 million, already exceeding its original full year target of P480 million.

Encouraged by its strong performance, RFM has upgraded its income forecast to P700 million by yearend.

Net sales rose 8.2 percent to P6.3 billion, primarily due to a series of successful product innovations in the company’s branded businesses, backed by aggressive marketing campaigns, especially in Fiesta pasta and Selecta milk products.

RFM president and chief executive Jose A. Concepcion III pointed out that the company has consistently recorded growth in earnings over the past five years, mainly due to the impressive performance of its key branded businesses like Selecta Ice Cream, a joint venture with global giant Unilever, and the flour-based businesses led by White King Fiesta, which continue to deliver increasing cashflows, while growing market share in their respective categories.

Selecta ice cream alone registered a 40 percent jump in sales, pulling up the entire ice cream market growth to 30 percent and thereby shoring up its market leadership position of 68 percent. Its competitors, on the other hand, reported a decline in their market shares.

“The company has also prioritized its expansion activities to support our revenue targets on the back of better cost structures and operating efficiencies. This will allow us to further increase our operating margins this year, sustaining a more profitable business model that will give RFM even better cashflows in the years to come,” Concepcion said.

RFM cited these developments as paving the way for significant improvements in standing three fronts. Aside from winning the hearts of the consumers as reflected in the main brands’ growing market shares, RFM has drawn again the interest of equity holders and investors, both local and foreign, as well as the full confidence of the financial sector.

The conglomerate successfully raised P1.5 billion from a corporate notes issuance recently, participated in by six of the largest financial institutions in the country.

The proceeds of the issue will be used for specific capital expenditure projects and general corporate purposes, that should further position RFM to continue its growth momentum in the years to come.

RFM is budgeting P1 billion for its expansion and working capital requirements next year in line with its strategy to boost revenues and improve operating margins.