Pepsi net income rises to P578 million in H1

MANILA, Philippines - Beverage maker Pepsi-Cola Products Philippines Inc. (PPI) grew its first semester net profit by more than five-fold to P577.5 million on record sales volumes across the carbonated soft drinks (CSD) and non-carbonated beverage (NCB) segments.

PPI is the exclusive bottler of PepsiCo beverages in the Philippines which include Pepsi-Cola, Mountain Dew, Seven Up, Mirinda, Gatorade and Tropicana, Mug, Tropicana, Lipton, Sting, and Premier.

With the company’s continued focus on growing a firm position in the CSD market and increasing the revenue share of NCBs in its portfolio, gross sales rose 16 percent to P11.3 billion. The growth was attributed to better pricing, sales mix and aggressive expansion and upgrade in manufacturing facilities and investments in glass bottles and coolers.

Earnings per share surged to P0.16 as of end-June 2012 from only P0.03 a year earlier.

Operating income jumped to P806.68 million, more than five times from P1.68 billion in the same period last year.

In the second quarter alone, net earnings amounted to P352.65 million, over 400 percent higher than the P75.79 reported in the same period in 2011.

“This remarkable achievement was fuelled by outstanding performance across brands and categories, particularly in the cola segment where we registered strong growth,” PCPPI president Partho Chakrabarti said.

The reduction of key raw and packaging materials costs also contributed to the company’s strong performance.

Operating expenses, which consists mainly of selling and distribution, general and administrative, and marketing expenses, remained manageable due to the company’s sustained efforts to control costs, with a negligible increase of.01 percent in the second quarter.

PPI expects to sustain higher profitability throughout 2012 on continued efforts to drive top-line growth, lower sugar prices, increased marketing efforts, tight-cost control measures and industry growth turnaround.

“We are buoyed by the terrific response of our consumers to our product innovations such as Sting Power Pacq with Malunggay and Gatorade Low Carb. With our continued focus on delivering the needs of our consumers, we hope to sustain the momentum for the rest the year,” Chakrabarti said.

PPI, partly owned by Lotte Chilsung, one of the biggest beverage companies in South Korea, has established manufacturing facilities across the country, serving at least 440,000 outlets and providing employment through its extensive distribution network.