RFM profit up 8.4% to P167 M in Q1

MANILA, Philippines - Food and beverage firm RFM Corp. managed to post higher profits in the first quarter as better margins offset the timid growth in sales.

In a disclosure, RFM said its earnings rose 8.4 percent to P167 million in the first three months of the year from P154 million while sales revenues inched up to P2.24 billion from P2.22 billion.

Despite the modest sales growth, profitability improved due to better margins in core businesses and higher sales of higher margin products, said RFM president and CEO Jose A. Concepcion III.

“The lower commodity input costs and managed operating expenses this year helped in bringing our cost levels down,” he added.

In particular, RFM reported double-digit growth in consumer brands, offsetting the weaker flour sales in the first quarter.

“The priority for us is to grow the branded side of our business and we are encouraged as well by the increasing consumer offtake readings for our Fiesta pasta, White King cake mixes and Selecta milk,” Concepcion said. Offtake reports tracks the actual sales to the consumers in major trade accounts.

“Moreover, revenues from our newly acquired Royal pasta have just started to be sold under RFM only in February, and sales level has so far been higher than levels posted last year by the previous owner,” Concepcion said.

RFM earlier strengthened its foothold in the pasta segment with the acquisition of the Royal brand and pasta business of Anglo-Dutch consumer goods giant Unilever Group for P2.1 billion. It allowed RFM’s share in the pasta market to improve to more than 50 percent.

RFM recorded stronger numbers with double-digit growth posted in April through main brands like Selecta milk and ice cream, and the pasta group, Concepcion said, adding that the company remains bullish for the entire year due to “ stronger consumer spending, and the market leadership and strength of our power brands Selecta, Fiesta and now also Royal.”

The food and beverage makers targets to grow its top line by 20 percent this year. Sales revenue of RFM dropped 6.69 percent to P10.3 billion in 2013 from P10.99 billion a year ago as it unloaded its meat business to the Century Pacific group.

Aside from pasta, RFM is also the firm behind White King cake and sauce mixes, and Sunkist beverage.