September 3, 2010
RFM to issue 5-year notes for capex
Philippine food and drink conglomerate RFM Corporation is planning to issue PHP2 billion (US$44.60 million) worth of five-year fixed or floating rate corporate notes to refinance debt and fund capital expenditures.
The notes issuance was approved by RFM's board of directors in a meeting held this week.
In a disclosure to the Philippine Stock Exchange, the company said the notes will be secured by a negative pledge on the corporation's assets.
RFM has earmarked PHP1 billion (US$22.29 million) for its expansion and working capital requirements next year in line with its strategy to boost revenues and improve operating margins.
In the first half of 2010, RFM posted a net income of PHP395 million (US$8.80 million), up 193 percent from the previous year-period as sales rose 10.2 percent to PHP4.2 billion (US$93.61 million). The growth was attributed to successful product innovations in the branded business, coupled with aggressive marketing campaigns.
Based on its impressive performance, RFM is optimistic that it would exceed its full year income target of PHP480 million (US$10.69 million).
The group's ice cream unit, Selecta-a joint venture with Unilever-registered a 50 growth in sales, boosting its market share to 68 percent, while its competitors reported a decline in their market shares.
Another RFM product, Fiesta spaghetti, also performed well, taking a dominant position due to its value-for-money proposition to consumers, as well as the improved performance of its Selecta milk and Swift meat groups.
