URC posts P10.1-B profit in 2013

MANILA, Philippines - Snacks and beverage giant Universal Robina Corp. (URC) registered a hefty 24-percent profit growth in its 2013 fiscal year due to strong sales here and abroad, the company said in a disclosure to the Philippine Stock Exchange..

“URC’s net income for fiscal year 2013 [that ended in September] reached P10.11 billion, a 23.6-percent increase from the P8.18 billion posted in the prior year,” the company told the local bourse.

The Gokongwei-led company committed to invest P9 billion this year to upgrade its production line and cater to continuous uptick in demand for branded consumer goods.

“Aside from higher operating income, the increase was due to higher other revenues as the company realized gains from the sale of its investment portfolio last January 2013 coupled with the reduction in finance cost with the prepayment of long-term debt and some short term debt and trust receipts,” it added.

In particular, URC’s Branded Consumer Foods (BCF) Group, including the packaging division, posted a 16.3-percent improvement in sales of goods and services to P65.4 billion from P56.25 billion a year ago.

Full-year sales of BCF Philippines climbed 22.8 percent to P42.18 billion from P34.35 billion.

“Beverage was the primary driver, backed by the strong performance of the Great Taste coffee business and C2 ready-to-drink (RTD) beverage,” URC said.

URC claims to be the number two player in the coffee market and remains the dominant market leader in salty snacks, candies, chocolates and ready-to-drink tea in the Philippines.

The international BCF business, for its part, recorded a 12-percent sales growth to $527 million in fiscal year 2013 driven by operations in Vietnam and Indonesia.

The commodity foods group of URC also reported a better performance, with sales increasing 8.3 percent to P8.2 billion from P7.57 billion, mainly due to higher revenues from the sugar business and volume contribution coming from the recently acquired mill. It was enough to offset a 4.8-percent sales drop in the flour business due to the influx of low cost imported flour.

Net sales of URC’s agro-industrial group was flat at P7.39 billion “as higher sales in farms was offset by the decline in feeds,” URC said.

Moving forward, URC allotted higher capital for the expansion of its production line and the construction of a bioethanol plant.

“The company budgeted about P9 billion for capital expenditures (including maintenance capex) and investment in fiscal year 2014,” URC said. It is higher than the P5.54 billion for fiscal year 2013, P5.12 billion for 2012 and P4.55 billion for 2011.

Specifically, URC allotted P5.73 billion for the installation of new lines to expand capacities in the snack foods and grocery products in the Philippines; new manufacturing plants, beverage and bakery lines in Vietnam; and expansion of biscuits and wafer lines in Thailand.

It will also spend P3 billion for the completion of bioethanol plant, construction of a power cogeneration plant and maintenance capital expenditures.

The agro-industrial group secured P270 million for farm expansion and handling facilities for feeds division.

URC is the company behind brands like Jack n’ Jill, Hunt’s, C2, Blend 45, Uno Feeds and Cream All.