Listed Vitarich Corp. on Monday said its income grew ninefold last year to P89.44 million from the previous year’s P9.29 million on higher revenues.
The company said its revenues reached a record P9.7 billion, up 23 percent from the previous year’s P7.88 billion driven by growth in all of its business segments.
“2021 not only delivered new revenue records across segments, but also pointed to higher long-term volume growth,” Ricardo Manuel M. Sarmiento, the company’s president and CEO, said.
“Our strategy to expand our capabilities has been validated by market trends toward rising consumption of meat products and convenience food. This formed the basis of our recent capital investments in the business, and as a result, we have good revenue visibility going into 2022.”
Cost of goods rose 21 percent to P8.9 billion due to higher sales volume and prices of raw materials such as wheat, soybean and corn which went up by an average of 12 percent from the previous year.
The cost inflation was due to several factors, including logistics challenges due to Covid-19, reimposed series of quarantine measures in the third quarter, as well as supply disruptions for soybeans in the fourth quarter due to high demand from China, increasing domestic use in the United States, and lower output from Brazil and Argentina.
Capital expenditure last year reached P117.7 million, primarily for the construction of a new warehouse in Davao and for additional machinery and equipment in Bulacan, Iloilo and Davao to meet volume demand and to upgrade bagging lines for automation.
Revenues from the feeds segment, which accounted for almost half of total sales, were up 14 percent to P4.7 billion with volumes reaching the highest levels ever for tie-up and commercial customers, such as distributors and direct farms. Sales volume climbed 12 percent while average selling prices rose by 3 percent.
The feeds segment produces and markets animal feeds, health and nutritional products and supplements to various distributors, dealers and end users nationwide.
Revenues from the foods segment, which accounted for 44 percent of revenues, grew 36 percent to P4.2 billion due to a 21-percent increase in sales volume and 12-percent increase in average selling prices.
The segment sells chicken broilers, either as live or dressed, to customers, supermarkets and wet markets.
Revenues from the farms segment, which accounted for 8 percent of the total business, registered a 19 percent increase to P778 million. Fair value adjustments on biological assets amounting to P55.1 million was recognized as part of revenues and P78 million as part of cost of goods.
The segment is involved in the production of day-old chicks and pullets.
“Looking ahead, we expect revenues to stay robust, but the ongoing challenges will temper the full impact of sales growth on our earnings. Supply chain headwinds will persist and pressure our costs in raw materials and transportation,” Sarmiento said.
“In view of these elevated input costs, we will continuously reconfigure our purchasing approach and explore new grain and protein sources to reduce dependency on corn, wheat, and soybean meal. We are positive that higher volumes, cost efficiency, and responsible price increases will help us meet our performance objectives while ensuring that our products remain affordable.”