November 19, 2007

Philippines' Alaska Milk doubles profit to P566 million

Philippine dairy giant Alaska Milk Corporation posted a 118 percent improvement in net income for the first nine months of the year of P566 million (US$13.10 million), on account of a strong third quarter performance, according to Manila Bulletin.

The company's chief operating officer and president Wilfred Steven Uytengsu, Jr.,  in said in a financial statement filed with the Securities and Exchange Commission (SEC), that it earned a net profit of P566 million as of end-September 2007, considerably higher than its reported profits of P260 million in the previous year.

For the third quarter of 2007 alone, Alaska Milk earned a net income of P168 million (US$3.89 million), an increase of 7.3 percent as against a net income of P104 million (US$2.40 million) during the same quarter last year. The company attributed its improved profits to higher net sales.

Higher sales volume across all product lines, combined with higher selling prices, pushed net sales for the third quarter of the year to P2.262 billion, 59 percent higher than last year's net sales of P1.42 billion, the company said in its quarterly financial report.

"Combined sales volume of the company's liquid canned milk business posted high double-digit growth rates year-on-year on account of the strong off-take of the Alaska brands as well as the additional sales volume generated from the acquisition and licensing of Nestle's liquid canned milk brands. Marketing support and volume-generating initiatives were sustained during the quarter to drive-up usage going into the peak Christmas season," it added.

Net sales for the first nine months of the year grew by 50 percent to P6.222 billion from P4.158 billion in the same period last year with higher sales volume across the company's core business combined with higher selling prices as well as the incremental revenues generated from the newly acquired and licensed liquid milk brands helped lift net sales year-on-year.

"With the exception of the Powdered Milk Category, retail consumption of milk products continued to contract year-on-year as consumer demand softened following two successive selling price increases in June and September 2007. The domestic milk market's contraction, however, was slower compared to the double-digit contraction a year ago," the company said.

In a move to further strengthen its dominance in the liquid milk market, Alaska has recently acquired local brands Alpine, Liberty, and Krem-Top from from Societe de Produits Nestle S.A.

Liberty and Alpine are strong regional milk brands, particularly in the Visayas and Mindanao regions. Krem-Top, on the other hand, has an established record in the food service business.

The acquisition, according to the company, would translate to P3-billion in additional revenues annually. This year, Uytengsu earlier said the company expects to earn as much as P9 billion in revenues.

US$ 1 = P43.185 (as of November 19)