RFM expects back-to-back banner years

MANILA, Philippines - Listed food and beverage firm RFM Corp. expects back-to-back banner years riding on hefty growth in profits and revenues.

The company will launch new products under its existing brands to maximize the continued improvement in consumer spending, an executive said.

“For 2013, we think profits and revenues will maintain the trajectory of about 15 to 20-percent growth,” Felicisimo M. Nacino Jr., executive vice-president and chief operating officer of RFM, said in a phone interview.

Nacino said RFM is seen to breach the P800-million mark this year.

“There is a strong showing of the consumer sector and economic growth is being driven by consumption so we are more optimistic than prior years,” Nacino said.

RFM posted a 34-percent surge in its net income to P682 million last year, up from P508 million in 2011 and surpassing a targeted 15-percent profit growth.

Sales of RFM rose 11 percent to P11.1 billion.

Nacino said the company is focusing on maintaining the market leadership of its brands Selecta ice cream and Fiesta pasta while growing sales of White King cake and sauce mixes, Selecta milk and Sunkist juice.

Selecta, the company behind premium ice cream Magnum, is a joint venture with Anglo-Dutch consumer goods giant Unilever. It already corners 74 percent of the local ice cream market.

RFM’s White King Fiesta division, which includes its fast-growing pasta business, holds 31.4 percent of the market.

Nacino added that new variants will be launched this year.

RFM is also banking on the election season that historically boosts sales.

“It remains to be seen. But we usually see a lift in sales basically for our beverage lines,” Nacino said.

“For the other products, what we are counting on more is the onset of a strong summer,” Nacino said.

However, the food manufacturer is observing the effects of a strong peso.

“Apart from increasing competition which is to be expected from a growing market, the other concern is the appreciating peso,” Nacino said, adding that it lowers the buying power of families of overseas Filipinos.

A strong peso, while making imports cheaper, also trims the value of dollar export earnings and remittances from overseas Filipinos when converted into local money.

The movements in raw material prices are tame so far, with RFM not expecting any spikes, Nacino said.

Last year, lower costs of milk, wheat and sugar kept operating expenses manageable.

RFM earlier announced plans to accelerate its growth organically and through possible acquisitions and strategic partnerships.