RFM OKs P1.2B Capex for future growth
We have been carefully passing on the cost of higher inputs and also tightening expenses to manage our margins.
Listed food and beverage company RFM Corporation disclosed that its Board of Directors approved its P1.2 billion capital expenditures plan to expand its milk production capacities and consumer and institutional businesses on Friday. In addition, the fund will lay the foundation for future growth.
The Board also approved a cash dividend of P200 million or P0.059355 per share.
In a disclosure, it said total cash dividends declared by RFM in 2022 now total P854 million or 65 percent of its 2021 net income and a total P0.253626 per share, with a dividend yield of 6.5 percent at the P3.9 per share prevailing stock price.
Its payment date is 11 October 2022, while the record date is 15 September 2022.
RFM Corporation is the maker of Selecta Milk, Royal, and Fiesta pasta and sauces, White King Mixes, and flour and bread.
RFM is also a 50 percent owner of the Unilever RFM Ice Cream joint venture that sells Selecta, Cornetto, and Magnum brands.
RFM CEO Joey Concepcion said that "this P1.2 billion Capex approval is one of the biggest Capex since the purchase of the Royal pasta brand in 2014. On top of the P200 million cash dividends we just declared, we plan to use our excess cash to fund the P1.2 billion Capex over the next 15 months. This Capex is expected to support the double-digit growth of our Selecta Milk offerings and the growing consumer and institutional businesses expected to double in five years."
Further, the company reported a 17 percent growth in sales for the first half of 2022, buoyed by ice cream, milk, and institutional businesses.
Concepcion said the company is doubling its support for the milk and other high-growth segments that will drive the topline of RFM over the coming years.
"The investment into more production capacity for milk and other high growth segments will support RFM's sales growth momentum even as there are current uncertainties in the global economy. We have been carefully passing on the cost of higher inputs and also tightening expenses to manage our margins. Our ice cream joint venture is also continually planning expansion to meet volume growth over the long term," said the CEO.