Splash earnings dip 41% in 2011

MANILA, Philippines - Weighed down by higher marketing, distribution and personnel costs, net earnings of leading Filipino-owned beauty and personal care products maker Splash Corp. dipped 41 percent last year to P86 million.

Based on its financial report submitted to the Philippine Stock Exchange, Splash said it ramped up investments in advertising and promotions to maintain or improve its market shares.

Net sales rose 17.3 percent to P3.5 billion, mainly driven by the steady performance across all business units. The newly-acquired food business contributed P84 million to total sales.

The company purchased 80 percent of Barrio Fiesta Manufacturing Corp. for P472 million in August 2011.

Cost of goods sold rose 21.6 percent to P1.65 billion, mainly due to higher cost of raw materials. Marketing, selling and distribution expenses grew 20 percent to P1.27 billion mainly on account of increased spending on advertising and promotions and personnel expenses.

Also contributing to the increase in expenses is the establishment of direct selling branches and independent business centers across the country.

Latest AC Nielsen data showed that Splash is still the leading personal care company and ranks fifth behind multinationals like Unilever and Procter & Gamble. Splash Corp., however, outranks other global personal care companies like L’Oreal and Beirrsdorf AG in Philippine retail.

Splash owns over 100 trademarks such as Extraderm, SkinWhite, Biolink and Theraherb which are registered in more than 50 countries including the ASEAN Group, the European Union, US, Canada, China/Hong Kong, Japan, South Korea, Taiwan, India, Iran, Jordan, Kuwait, Qatar, Saudi Arabia and the UAE.

Splash has set a capital expenditure program of nearly P300 million this year to continue its expansion locally and abroad as well as grow its presence in the food business.

Of the total, P152.2 million will be used to acquire new machineries for new beauty products while P142.6 million will go to Splash Foods Corp., a newly-formed unit that owns the Barrio Fiesta brand of canned food and condiments.

Splash aims to become a major player in the food industry through the expansion of food lines and capitalizing on its marketing and distribution capabilities in specific countries.