July 9, 2010
RFM earnings jump more than sevenfold
Philippine food and beverage conglomerate RFM Corporation reported a more than seven-fold jump in its net earnings in the first five months of the year on aggressive marketing activities and new product launches.
RFM said in its disclosure form to the Philippine Stock Exchange that its net income from January to May 2010 reached PHP320.8 million (US$6.92 million).
Given this strong performance, the conglomerate expects to exceed its PHP500-million (US$10.79 million) net income target this year with net earnings for the first half of 2010 already seen at around PHP400 million (US$8.63 million).
In 2009, RFM's net profit amounted to PHP365 million (US$7.87 million) or 49 percent higher than the year-earlier level. Net sales rose six percent to PHP7.97 billion (US$172.06 million) from the PHP7.55 billion (US$162.99 million) recorded in 2008.
RFM president and chief executive officer Joey Concepcion attributed the current year's performance to robust sales results brought about by several product innovations. He said that from last year, the company has increased by 50% its investments in marketing build brand equity.
Revenue growth, coupled with better-managed cost structures and operating efficiencies, have pushed up operating margins this year, the RFM chief executive said. Concepcion added that RFM have now arrived at a sustainable business model that will propel the company to its next level of growth.
Selecta ice cream, which is a joint venture with Unilever, posted a remarkable performance of over 50-percent sales growth, even over 100-percent growth in some product segments, for the first half of the year. Concepcion said this is quite unprecedented for a brand that is already the dominant market leader in ice cream at 59-percent market share. Selecta will become an increasingly important contributor to the topline and bottomline numbers of RFM.
He also cited the significant market inroads being made by another RFM product, Fiesta spaghetti, which has become the top spaghetti brand in the country, on the strength of its value-for-money proposition to consumers. Concepcion also credited the major improvements achieved in the operating performance of its Selecta milk and Swift meat groups.
RFM's board also approved yesterday a regular cash dividend policy allotting 30 percent of its recurring net income beginning this year for annual distribution to its shareholders.
