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2008 profits of Gokongwei food unit fall 94%

abs-cbnNEWS.com | 01/15/2009 2:44 PM

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The Gokongwei-controlled food and beverage firm Universal Robina Corp. (URC) said its net income for the fiscal year ending September 2008 fell P341 million, down 94 percent from the P5.501 billion it posted a year earlier.

In a disclosure to the stock exchange Thursday, URC said the decline was caused by the absence of the non-recurring gain of P2.85 billion from the company's sale of Robinson Land Corp. shares in 2007 and due to mark to market losses in its bond holdings from the drop in bond prices worldwide.

Its consolidated net sales and services, on the other hand, rose 20.5 percent to P45.45 billion from P37.72 billion a year earlier.

URC, whose fiscal year covers the period October to September, said the branded consumer foods segment contributed the biggest to its total sales amounting to P34.7 billion from P28.37 billion a year earlier.

“This increase was due mainly to the 19.1 percent increase in net sales of URC's domestic operations, coming from the impressive growth in snack foods sales. Snackfoods posted 22.7 percent growth on savory snacks, candies, chocolates, biscuits and bakery sales increases,” it said.

The Granny Goose snacks business, which was bought by URC from General Milling Co. earlier, also started delivering sales in the 4th quarter of the fiscal year. Beverages,on the other hand, grew 8.4 percent versus last year, primarily driven by its coffee products. The grocery division also grew 22.7 percent as the noodle products made inroads against the competitors.

The company's international operations also delivered good news as net sales rose 42.7 percent from $150 million to $215 million at the end of 2008 fiscal year. URC Thailand posted its 5th consecutive annual double-digit growth, reaching $997 million in sales. URC Vietnam also had a significant year as sales grew to $31 million from $6 million on the back of the unprecedented growth of the C2 brand.

“To date, C2 holds a leading market position in Vietnam and is now exported to Malaysia and Indonesia,” URC said.

For the new fiscal year, the company said it will be tightening its belt as the current global market crisis makes access to credit more expensive.

“URC will rationalize its capital expenditures for fiscal 2009 and will reduce working capital in order to be leaner and more efficient organization. Despite these challenges, we expect sales and operating income to grow in the high teens as raw material prices stabilize in the coming months and as our international operations achieve profitability,” URC said.