URC income down 12% to P12.8 billion

GOKONGWEI-led food and beverage manufacturer Universal Robina Corp. (URC) saw a 12% decline in its 2023 net income to P12.8 billion despite higher sales.

In a regulatory filing on Thursday, URC said the decline in net income was due to “higher comparables from gain on land sale” in 2022.

The company’s sales rose by 6% to P158.4 in 2023 billion, while operating income improved by 14% to P17.4 billion.

“Both the branded consumer foods (BCF) and the agro-industrial & commodities (AIC) businesses continued their momentum into the fourth quarter, growing sequentially versus the previous quarter,” URC said.

“Operating margins continue to expand, hitting 11%, driven by the company’s strategic pricing moves and continued operational savings,” it added.

Excluding packaging, URC said the sales of its BCF group rose by 2% to P108.4 billion in 2023.

Revenues of the domestic BCF business increased by 3% to P75.6 billion. Its categories showed mixed performance with snacks and ready-to-drink beverages driving growth, offsetting challenges in some segments

The international BCF business saw a 2% growth in revenues to P32.8 billion, led by stronger performances in Vietnam and Malaysia.

URC’s AIC group recorded a 16% growth in sales to P48.8 billion as the agro-industrial, sugar and renewables, and flour businesses maintained their double-digit growth, driven by higher volumes, favorable sugar prices, and continued growth of its pet food segment.

“Over the past few years the company has made purposeful strategic decisions to enter new segments outside our core categories in the Philippines and to build new legs in international, all of which we are seeing come to fruition. We have also continued to make good progress in our fuel for growth program, surpassing our initial commitments on operational efficiencies and savings,” URC President and Chief Executive Officer Irwin C. Lee said.

“These initiatives will allow us to continue delivering on our mission — to provide our consumers with good food and beverage choices for the years to come,” he added.

Meanwhile, the company’s core net income rose by 6% to P12.6 billion in 2023 due to the higher operating income but was tempered by higher interest rates.

“URC’s financial position remains strong, with a healthy cash balance of P12.2 billion, net debt of P13.4 billion, and a gearing ratio of 0.23,” it said.

On Thursday, URC shares fell by 1.16% or P1.30 to P110.30 each. — Revin Mikhael D. Ochave