MACAY Holdings, Inc., the manufacturer and distributor of soda brand RC Cola, said net income last year dropped 10 percent due to tight market competition.
In a regulatory filing, Macay said net income dropped to P1.6 billion from the P1.8 billion posted in the previous year.
Consolidated net revenues declined by 5.7 percent from P11.38 billion in 2016 to P10.73 billion last year.
“This was due to stiff competition and because sales in 2016 was unusually high since it was an election year,” the company said.
Cost of sales declined by a bigger 8.7 percent due to lower sugar prices and increased efficiencies.
Selling and marketing expenses increased by 13.9 percent last year to P1.28 billion from P1.13 billion a year earlier as advertising and promotional activities were intensified to counter competitors’ attempt to grab market share.
General and administrative expenses increased by P55.2 million due mostly to rationalization of security agency fees and documentary stamps on stock dividends.
Interest income more than doubled in 2017 but was more than offset by the company’s share in the net loss in a joint venture resulting in a decrease in other income by P1.5 million.
Income before tax declined by 8.6 percent, but provision for income tax went down by only 4.2 percent due to a much lower remaining net operating loss carry over last year of P17.8 million compared to P153.3 million in 2016.