February 14, 2011

Alaska Milk posts more than US$40 million record income in 2010

Philippine dairy giant Alaska Milk Corporation reported all-time high earnings of PHP1.82 billion last year (US$41.57 million), up 29 percent from the year before on sustained sales volume growth across all business lines coupled with continuing efforts to improve operating efficiencies.

In a financial report submitted to securities regulators, Alaska said revenues rose 15 percent to PHP12.16 billion (US$277.75 million) as demand for its evaporated and sweetened condensed milk products remained strong.

Sales volume of the company's powdered milk business likewise expanded on the back of increased consumption alongside brand-building initiatives. The UHT business sustained its growth trajectory on brisk sales, with sales volume posting strong growth rates.

Improvements in brand and retail management likewise translated in market share expansions for the company's line of ready-to-drink UHT milk products and all-purpose cream product.

With costs of major raw materials expanding at a slower pace, underpinned by a strong peso, operating margin improved to 19.1 percent from 17.9 percent a year ago.

Cost of sales grew at a slower pace of 11 percent as a result of the company's strategic buying initiatives for its major raw materials, particularly skimmed milk powder, tinplate, sugar and coconut oil. Operating expenses, on the other hand, edged higher due to heightened advertising and promotional spending to drive consumer demand as well as higher distribution-related charges attendant to increased sales volume.

Net interest income surged to PHP48.7 million (US$1.11 million) from PHP22.2 million (US$507,080 million) a year ago on increased average cash balance.