Ice-cream, pasta businesses nudge up RFM Corp.’s profit

FOOD and beverage firm RFM Corp. said its net income grew a slim 6 percent last year, helped mainly by its ice-cream and pasta businesses.

The company said it booked a profit of P1.06 billion for 2017, from the previous year’s P1 billion, while sales revenues rose to P12.7 billion, from last year’s P5.3 billion.

RFM President and CEO Jose A. Concepcion III said, based on latest unaudited financials, the company’s consumer-branded businesses, such as Selecta ice cream and Fiesta pasta line, along with institutional bun line business, led the top-line growth amid continuing price pressures in the commodity flour business.

“With resilient consumer-branded businesses, RFM continues to see healthy income growth and, as a result, we have just recently declared a P300-million cash dividend, which is just the first tranche of the 50-percent dividend payout of our P1.06-billion net income [in 2017], as well as another P300-million budget for our continuing share buyback program,” Concepcion said.

Revenues of Selecta grew 13 percent year-on-year, driving category growth. The ice-cream joint venture with Unilever has just embarked on a P1-billion capital expenditure (capex) to meet the growth requirements for the medium term.

“The strong ice-cream revenue growth, as well as positive growth in the pasta branded businesses, was mitigated by the softer institutional sales as flour prices remained soft,” he said.

The P1-billion capex of the ice-cream business is self-funded by the joint venture, while the ongoing flour-mill capex upgrade of P240 million has been fully funded by internal cash, the company said.

“RFM sees continued consumer-consumption growth in the coming years, and we are investing already to be able to take full advantage of that growth. For 2018, we see sustained growth in our ice cream and faster growth in the pasta business”, Concepcion said. “We also plan to push our RTD [ready-to-drink] milk lines for faster growth this year.”

Turning Points 2018
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