URC profit slips despite sales growth

Universal Robina Corp. (URC), the food and beverage arm of the Gokongwei Group, reported a net income of P6.7 billion for the first half of the year, down 11 percent from a year ago. 

The company said in its Friday disclosure that the bottom line was affected by an impairment charge from the discontinuation of part of its packaging segment. Excluding this one-time charge, core net income grew 3 percent to P6.9 billion.

Sales for the period reached P85.9 billion, up 6 percent from last year, supported by gains across key business units. 

Branded Consumer Foods revenues rose 5 percent to P57.8 billion, driven by double-digit growth in snacks and ready-to-drink beverages, while coffee and noodles continued to face stiff competition. 

URC International sales increased 7 percent to P18.2 billion, boosted by Munchy’s strong performance in Malaysia and rapid growth in Indonesia.

The Commodities segment posted a 16 percent increase in sales to P21.7 billion on higher sugar volumes from an extended milling season, while animal nutrition was affected by the secondary effects of African swine fever.

“The strong volume-driven growth across our branded consumer food business thus far is a testament to the strength of our portfolio," URC President and CEO Irwin Lee said.

"We expect to sustain this momentum for the balance of the year as we continue to provide the best value to our customers and generate healthy returns for our shareholders,” Lee added.

Operating income was steady at P9.4 billion, with stable margins for the Branded Consumer Foods segment.

Higher coffee costs weighed on Philippine operations but were offset by cost management programs and improved scale overseas.