URC FY 6-month profits up 4.3% at P6.49B

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Snack food and beverage firm Universal Robina Corp. (URC) showed a 4.3-percent increase in its net income for the first semester of its fiscal year ending September to P6.49 billion from P6.22 billion for the same the previous year.

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URC said in a statement net sales during the six-month period went up 21.6 percent to P55.644 billion from P45.75 billion from the previous year, and its operating income also grew 26.3 percent to P8.85 billion from P7 billion for the same period last year.

Growth in net income was slower than operating income due to higher finance costs and equity share in net losses and unrealized foreign exchange losses from joint ventures signed last year, which included Calbee-URC Inc. and Danone Universal Robina Beverages Inc.

Its acquisition of New Zealand-based Griffin’s Food Limited was financed by long term debts that lead to URC’s debt position at P18.48 billion with a financial gearing ratio of 0.51.

But overall strong sales was mainly driven by the branded foods, complemented by modest performance of sugar and feeds businesses.

The Philippine branded consumer foods (BCF) business increased its sales by 15.7 percent to P29.64 billion from P25.62 billion last year, the bulk of which came from the beverage segment, mainly consisting of coffee mixes and ready-to-drink beverages

Sales from the international BCF segment rose by 37.8 percent with the consolidation of Griffin’s starting November upon completing the acquisition and strong sales in Thailand, Vietnam and Indonesia.

Non-branded consumer foods sales—which consist of commodity foods and agro-industrial groups—improved by 16.9 percent in the first fiscal semester on the back of higher sales of sugar and feeds, which grew by 61.1 percent and 19.6 percent, respectively.

A total of P2.475 billion out of the P9 billion capital expenditures (capex) set aside for the 2015 fiscal year was spent mainly to kickstart its capacity expansion in the BCF segment, with the consolidation of acquisitions and joint ventures made last year. The company also allocated P6.545 billion for its annual cash dividends.

The P9-billion capex this fiscal year from October 2014 to September 2015 is higher than last year’s P7.69-billion actual spending, which jumpstarted its capacity expansion mostly for the branded consumer food (BCF) products.

In November last year, URC acquired New Zealand Snack Food Holdings Limited (NZSFHL) to consolidate the leading snack food brand Griffin’s Food Limited into the firm’s BCF segment.

In terms of joint ventures last year, URC engaged in a water venture with Danone Asia Holdings Private Limited, manufacturer and distributor of Evian water; as well as the snack food venture with Japan-based Calbee Inc. to form the Calbee Jack N’ Jill brand in the Philippines.

URC—under parent conglomerate JG Summit Holdings Inc. of the Gokongwei family—manufactures snacks, candies, chocolates, and ready-to-drink tea under the C2 green tea and Jack N’ Jill brands. It is the number two player in the coffee segment via Cafe Puro and Nescafe.

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