Universal Robina Corp. (PSE: URC) posted net sales of PhP33.3 billion for the first quarter, a 7% increase year-on-year. Operating income, excluding hogs market valuation, grew by 10% to PhP4 billion with margins improving by 32 basis points versus last year. This was driven by higher sales volumes and average selling prices.
URC net income amounted to PhP3.1 billion, a growth of 3% versus same period last year, driven by the positive operating income with offsets coming from lower forex gain and higher finance cost. URC’s financial position remains to be strong with ending cash balance of PhP10.1 billion and a net debt position of PhP30.9 billion due to the remaining debt associated with the Oceania acquisitions. Gearing remains low and manageable at 0.52.
Sales Performance Per Business
Branded Consumer Foods (BCF)
Sales of domestic and international branded consumer foods grew by 5% versus same period last year, amounting to PhP25.7 billion. Domestic revenues for the quarter increased by 11% to PhP15.6 billion, driven by the good performance of all categories, with coffee pivoting back to growth after three years of decline.
Internationally, sales declined by 3% in peso terms to PhP10.2 billion, driven by foreign exchange devaluation in Australia and New Zealand ranging from 8-10%. International operating income, on the other hand, grew by 5% versus last year as margins expanded despite weaker currencies.
Agro-Industrial & Commodities (AIC)
The industrial businesses continue to be a relevant and consistent contributor to total URC. Sales amounted to PhP7.2 billion, a 16% increase versus last year, while operating income remains robust at PhP1.4 billion, a 17% increase versus last year.
Agro-industrial sales grew strongly by 21%, driven mainly by higher feeds sales. The commodities division grew by 13%, with flour and pasta posting 25% growth on higher volumes, while sugar and renewables (SURE) achieved a 9% topline growth as a result of higher selling prices.
Irwin Lee, URC President and CEO, said, “We are very pleased with the results especially the stronger top line momentum coming from our businesses in the Philippines. While the environment continues to be very challenging, the transformation plans we have set in place have started to gain traction. The entire URC team is now heavily focused on execution with the aim of sustaining what we have achieved for the balance of the year and beyond. We also expect to hold or slightly improve our operating margins for the year.”
Commitment to Environment Social & Governance
URC previously announced its purposeful transformation with the aim of formally adopting an environment social & governance (ESG) program for the company. To support this, URC has embedded sustainability as one of its key strategic thrust anchored on its people and planet friendly culture strategy.
URC has identified key material impacts it can target in the natural resources, people, products, supply chain, and economic areas. After months of baselining, URC officially announced its sustainability targets and commitments for the first three areas, which are aligned to the 2030 UN Sustainable Development Goals, as follows:
1) Natural resources
- URC will reduce energy, green house gas emissions and water usage by 30%
- URC promotes a safe working environment towards zero lost time injuries in the workplace
- URC empowers the organization through its people & planet friendly culture initiatives, ensuring holistic growth of our employees at all levels.
- URC commits to improve people’s capabilities leading to better livelihood, improved nutritional level, and environmental stewardship in communities where the company lives and operates.
- URC will consistently deliver products of high quality.
- URC will Improve the nutrition & wellness profile of its product portfolio aligned to the URC Wellness Criteria
- URC will reduce its packaging footprint and make 60% of its packaging recyclable.
Lee said, “This transformation is in line with our vision for URC to become a preeminent sustainable enterprise. We will continue to deliver value for the business while at the same time, do what is right for society. We believe we can continue to do well by doing good.”