RFM income jumps 40% in January-May

MANILA, Philippines - RFM Corp., the food and beverage concern of the Concepcion family, said its net income jumped 40 percent in the first five months of the year to P240.98 million on higher sales across most of its products.

In a disclosure to the Philippine Stock Exchange yesterday, RFM said total sales went up 10 percent to P4.32 billion, mainly driven by strong consumer spending and successful cost-containment measures implemented by management.

RFM president and chief executive officer Jose A. Concepcion III attributed the income growth to better margins from its production processes due to the easing of commodity cost inputs such as milk and sugar that started in the second half of last year as well as its continuing efforts to cut costs and improve yields further.

Concepcion said the group is particularly amazed by the spectacular consumer acceptance of its newly launched Magnum ice cream (the Belgian chocolate ice cream on-stick) which has become a craze among the youth market.

“From the time we launched in mid-March, we have not fully caught up yet with demand. We continue to have to deal with out-of-stock situations, although we have managed to reduce the frequency of shortage in recent weeks. We have already expanded five times the number of outlets where Magnum is made available. Selecta alone registered growth of over 30 percent over last year, “ Concepcion said.

Selecta currently holds over 70 percent of the ice cream market.

Concepcion said RFM’s White King/ Fiesta division, which includes its fast-growing pasta business, has also been performing very well with over 50 percent growth, further expanding its market leadership position to 29 percent from 25 percent last year.

“We believe that stronger brand equity and product innovations have influenced the shift in buying pattern and frequency in a number of categories we participate in,” Concepcion said.

He said sales of Selecta milk, Sunkist juice drinks and Swift Corned Beef and Karne Norte in sachets also posted double-digit growth rates.

During the period in review, RFM inked a partnership with Kansas-based Engrain LLC to produce and sell flour and bread-related products.

The joint venture company, Engrain-RFM Pacific Inc., will distribute flour mixes that improve the quality and performance of flour in bread and other products.