BOTTLER Pepsi-Cola Products Philippines Inc. said its income fell 17 percent to P159.26 million during the first quarter of the year, despite its double-digit sales increase for the period.
The company said its income was down to P159.26 million, from last year’s P191.98 million, mainly as a result of higher sugar prices and start-up cost for the operation of its snacks business.
The company is now locally manufacturing the Cheetos brand and several other international snack brands are expected to follow suit. Gross sales revenue increased 12 percent for the period to P8.19 billion, from last year’s P7.31 billion. This growth is reflected across the company’s major product categories and geographies, driven by volume growth and strong focus on revenue management, it said.
“We are pleased by a strong start to the year. Our beverage business grew double digits backed by innovations. Our snacks business is also off to an encouraging start. Consumers are loving the idea of being able to buy their favorite Cheetos and Lays brands at very affordable prices,” company president Furqan Ahmed Syed said.
Cost of goods sold increased by 16 percent for the quarter, driven by the sharp increase in sugar prices. “It was a tough quarter from a profit perspective, largely due to very high sugar prices versus the same period last year. We are further accelerating our productivity journey to mitigate the impact of sugar pricing balance of the year,” Syed said.
The company spent significant investments in manufacturing and distribution assets amounting to P1.5 billion to sustain a strong top-line performance. Operating expenses expressed as a percentage of net sales were 144 basis points better than a year ago, driven by the company’s prudent cost-management initiatives, it said.
The company inaugurated its snacks manufacturing facility in Laguna last February as part of the company’s long-term strategy to further diversify its product offerings.