Local sales lift Universal Robina's profit

SNACKS and beverage giant Universal Robina Corp. (URC) reported a 5.7% increase in profit in its second fiscal quarter ending March on the back of strong growth in both domestic and international sales. In its quarterly report submitted to the stock exchange, the conglomerate said it made P3.33 billion from January to March, which compares with P3.15 billion during the same three-month period last year.

URC’s fiscal year ends in September. Its first-half earnings rose 14.4% to P6.22 billion. Total net sales grew 13.5% to P45.74 billion from October to March. Driving sales are its powdered beverage business, which expanded 42.2%, while salty snacks, bakery and confectionery segments posted 18% growth. The company’s Branded Consumer Foods Group, the division behind Jack ‘N Jill snacks and the C2 tea brands, saw 26.7% growth in sales locally, although it also posted 9.9% growth on the international front. URC has business in Vietnam, Thailand, Indonesia, Malaysia, Singapore, and Hong Kong.

URC President and CEO Lance Y. Gokongwei noted prospects for faster regional growth, as the company improved its foothold in Southeast Asian markets. “Over the long-term, we expect the foreign [operations] to grow faster,” Mr. Gokongwei told reporters on the sidelines of the company’s annual stockholders’ meeting yesterday. “But in the immediate… maybe for the next year, year and a half, we expect Philippine [sales] to do very well, because the economy here is performing very strongly,” he added. Mr. Gokongwei noted that regional operations are integral to URC’s strategy. “We’d like to reduce dependencies on any single geography or any single brand,” he said. “That’s always been our strategy - to try to broaden our geographical [reach].”

        The 9.9% growth in first-half net sales in URC’s international markets was led by operations in Thailand and Vietnam. “Thailand growth occurred despite the weak macro environment and the political turmoil in the country mainly due to new product launches. Vietnam showed signs of recovery from the weakness in beverage sales posted last quarter and weak consumer demand which affected total Fast Moving Consumer Goods sales in the country,” URC said in a separate statement.

         URC said that its operating income increased by 42.2% to P7 billion in the first half of fiscal year 2014, on the back of “relaxed input prices, higher sales volume and increasing scale. ”The company said that income growth was slower than operating income growth due to “market valuation loss and decrease in net finance revenue as the company disposed of all bond investments and a significant portion of equity investments last year.”