RFM says profit rises 9% in 2015

EARNINGS and sales of food and beverage company RFM Corp. hit all-time high levels last year, anchored on the strength of its pasta and ice cream businesses.

The Concepcion-led manufacturer booked a 9% year-on-year rise in net income to P908.40 million, the firm said in a disclosure to the stock exchange yesterday.

“No surprises. It is just in line with estimates,” Lexter L. Azurin, head of research at Unicapital Securities, Inc., said in a telephone interview.

However, the figure fell short of initial estimates made by RFM President and Chief Executive Officer Jose A. Concepcion III in July. At that time, he said the company’s net income could reach P1 billion in 2015, but issued a warning three months later that supply chain and logistics challenges may weigh on its full-year financial performance.

Sales revenues jumped 11% year on year to P12 billion, as the pasta business under the Fiesta and Royal brands expanded at a record pace coupled with the double-digit growth rate in its ice cream business under the Selecta brand.

The company’s pasta business topped the single- digit growth rate of the pasta category, benefitting from the improved line-up of distributors and resolution of placement issues with some accounts, Mr. Concepcion said.

Likewise, the ice cream business “expanded the market and increased consumption frequency with new product innovations and value propositions.”

“Income also registered a new-high level as we sold more of the higher- margin products and as we hit better economies of scale that helped spread overhead costs,” Mr. Concepcion was quoted in the statement as saying.

Also, other businesses like milk showed improved performance after fine-tuning its business model, he added.