RFM Income Hits PhP241M in May

Manila–(PHStocks)–Food and beverage company RFM Corporation (PSE: RFM) reached Php240.98 million in net income for the period January-May 2012, up by about 40% over the same period last year. In the course of its annual stockholders meeting held yesterday, the company said its income growth accelerated from the 30% reported during the first quarter of the year and appeared to be well on the way to reaching its full year target.

Total sales for the first five months of the year climbed to PhP4.32 billion, higher by 10% over last year.

RFM President and CEO Jose A. Concepcion III said the companyís income growth is gaining momentum with better margins from its production processes, due to the easing of commodity cost inputs such as milk and sugar that started in the second half of last year, as well as its continuing efforts to cut processing costs and improve yields further.

Sales revenues growth also helped pushed profitability, Concepcion said. The friendlier macro environment at the start of the year boosted consumer confidence and spending. He explained that ìpractically all the companyís brands have been showing growth over last year, led by Selecta, our ice cream joint venture with Unilever, our White King Fiesta pasta, Selecta milk and Sunkist juice”.

Concepcion added, “We are amazed in particular by the spectacular consumer acceptance of our newly launched Magnum ice cream (the Belgian chocolate ice cream on-stick) which has become a craze among the youth market. From the time we launched in mid-March, we have not fully caught up yet with demand. We continue to have to deal with out-of-stock situations, although we have managed to reduce the frequency of shortage in recent weeks. We have already expanded five times the number of outlets where Magnum is made available. Selecta alone registered growth of over 30% vs. last year. The good thing here is that other Selecta sub-brands like Cornetto and Classic have not been left behind and are also posting over 30% growth, since those brands also launched their respective product innovations like the Selecta Overload, the Selecta super-thick Classics, the Hersheys collection, and the Cornetto disc. Selecta is definitely growing the entire ice creamcategory with all these innovations increasing the frequency of Selecta ice cream consumption. Selecta now has over 70% market share.”

RFM’s White King/ Fiesta division, which includes its fast-growing pasta business, has also been performing very well with over 50% growth, thus expanding its market leadership position to 29%, from 25% last year, according to Concepcion. The consistently firm pasta quality at affordable pricing levels has made Fiesta more preferred than the former leading pasta brand. Other White King lines of flour mixes, Arroz Caldo and Champorado have also captured a good slice of the market that prefers easy-to-prepare Filipino native cakes and hot porridge dishes, with good value-formoney positioning.

“We believe that stronger brand equity and product innovations have influenced the shift in buying pattern and frequency in a number of categories we participate in,” Concepcion said. “As we become the market leader in these categories, we are increasing the frequency of consumption and growing the size of the market,” he explained.

RFM reported that aside from Selecta ice cream and Fiesta pasta, sales of Selecta milk, Sunkist juice drinks and Swift Corned Beef and Karne Norte in sachets (Swak Pack) also posted double-digit growth rates. These came about as the company rationalized further and focused its brand portfolio, supported by more exciting product repackaging, aggressive merchandising, advertising and trade-related programs.

Also in the first five months of the year, RFMís recent disclosures included the launch of its joint venture with leading US flour R&D company, Engrain, that will develop and market in the Asia-Pacific flour-related enhancers that will improve the quality and performance of flour products. RFM also signed a major distributorship agreement with global pineapple leader Dole, to serve as the main distributor of Dole packaged food in selected modern trade accounts and all downline accounts nationwide.

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