UNIVERSAL Robina Corp. (URC), the food group of the Gokongwei family, has reduced its revenue growth outlook for the year of only 6 percent to 7 percent, from an earlier announced 8 percent to 9 percent, citing tougher market conditions.
In a recent briefing, company officials said the company would continue to reel from the effects of El Niño, seen to linger in the next 12 months.
The company also expects “a tougher competitive environment across market in its key categories beyond coffee.”
For the rest of the year, URC plans to continue strengthening its portfolio with new products, price points, and value-for-money offerings while expanding distribution and availability of its brands.
URC is also scaling up its affordable premium products from its joint ventures and may introduce Griffin’s in the local market and other key areas, where the company already has a presence.
The company, however, sees foreign-exchange stabilizing that could lead to an operating income growth of 10 percent for its fiscal year.
URC claims to be in the top 3 of the categories, where they have presence, in countries such as the Philippines, Thailand, Vietnam and now in New Zealand, but only for the Griffin’s products.
URC said profit for the first six months of its fiscal year ending September hit P8.39 billion, up 29 percent from last year’s P6.49 billion.
Net sales stood at P58.54 billion, 5 percent higher than last year’s P55.64 billion, mainly driven by its core branded consumer foods, Griffin’s and renewables.
URC said the profit growth was driven by unrealized forex gains and market valuation of financial assets from the gain of Griffin’s debt-currency forward hedge.
Sales of branded consumer foods in the Philippines, including packaging, were up by 2.7 percent, while the international business grew faster with a 7.7-percent growth. The nonbranded consumer foods group, comprised of agro-industrial group and commodity-foods group, grew 9 percent, driven by sugar and renewables, which increased by 30 percent.
The agro-industrial group’s sales were also flat due to mixed results from its segments. Sales from the farms group was down by 17 percent due to the decrease in both sales volume and average selling price of hogs and the operating costs related to the company’s slaughterhouse.
Operating income was up by 6 percent amounting to P9.39 billion, from last year’s P8.85 billion. Margin was at 16 percent, 14 basis points higher than 15.9 percent last year, due to lower input prices on the branded-food business.