050407: RFM profit contracts 50% on higher costs

By Zinnia B. Dela Pena
The Philippine Star 05/04/2007

Weighed down by higher production costs, Concepcion-owned food and beverage concern RFM Corp. reported a 50 percent drop in net profit last year to P144.25 million from P288.75 million in 2005.

In a financial report filed with the Securities and Exchange Commission, RFM said net sales reached P3.83 billion as against P4.125 billion while cost of goods sold declined to P3.16 billion from P3.38 billion.

Gross profit likewise fell to P667.93 million from P740.63 million. Interest income also decreased to P19.15 million from P33.51 million.

While other income jumped 293.2 percent to P64.33 million, selling and marketing expenses grew to P410.01 million from only P357.18 million.

"Increased production costs coupled with the constraint in raising selling prices due to tighter competition negatively affected gross profit on food business," RFM said.

RFM is banking its growth strategy on manufacturing and selling affordable, quality food and beverage products for the mass market. It is developing new products that are priced within the reach of the broader income classes who put priority on getting value-for-money from their daily food purchases.

Last year, RFM launched what it calls the people’s milk, Selecta Fortified Milk. It has since then gained overwhelming market acceptance for its exceptionally good taste and reasonable price.

RFM’s property unit, Philippine Townships Inc., posted a net income of P26 million last year, a reversal of the P216 million loss incurred the previous year, mainly due to sales from its residential condominium projects.

As of end 2006, RFM’s total assets stood at P9.4 billion, up six percent from P8.9 billion.

Bank loans also rose six percent as RFM’s property business obtained loans from various banks to finance ongoing projects.

RFM also makes and markets Fiesta pasta and White King flour mixes, ready-to-drink Sunkist juice and tea, Swift processed and canned meats, and Selecta ice cream in joint venture with Unilever.

 

http://www.philstar.com/philstar/NEWS200705040711.htm