Gokongwei-led Universal Robina Corp. (URC) grew its net profit last year by 7 percent to P10.1 billion, driven by the recovery of the local coffee and ready-to-drink tea businesses alongside the double-digit growth of the animal feeds and flour segments.
URC’s net sales for the year amounted to P134.2 billion, up by 5 percent from the previous year, while operating income, including hogs market valuation, rose by 12 percent to P15 billion. Margins improved by 72 basis points versus last year, URC disclosed to the Philippine Stock Exchange.
The 7-percent profit growth was driven by the increase in operating income, offset by finance cost, other expenses, and adverse foreign exchange movement.
Sales of domestic and international branded consumer foods contributed P105.9 billion.
Domestic revenues increased by 8 percent, while operating income pivoted back to growth of 12 percent versus last year. This was driven by the turnaround of Great Taste coffee, acceleration of Jack n’ Jill snacks and Noodles, recovery of C2 ready-to-drink tea and contributions from joint venture businesses with Danone and Vitasoy.
International revenues increased by 2 percent on a constant currency basis, but declined by 2 percent in peso terms to P42.2 billion, due to negative impact of foreign exchange translation.
On the other hand, international operating income still grew by 8 percent versus last year as margins expanded by 89 basis points given the continuous recovery in Vietnam.
The agro-industrial and commodities businesses saw a 12-percent growth in sales to P28.3 billion, while operating income also grew by 12 percent. This was driven mainly by strong growth in animal feeds and pet food segments. The commodities foods group grew revenues by 12 percent, with flour posting a 26-percent sales growth while sugar and renewable energy segments grew business by 6 percent.
URC president and chief executive officer Irwin Lee said: “2019 was an important pivot year and this sets a solid base in our glidepath back to sustainable growth and profitability. We are happy that we have accelerated the growth of the Philippine business and have brought our core branded foods business back on track. Our transformation journey continues in full throttle as we take on the new challenges of 2020 and beyond.”
“We will continue to reinvest in brand building through innovation and enhance our distribution further as we anticipate a stronger fightback from the competition. Despite the challenges ahead, we are excited with our portfolio line-up this year as we continue to strengthen our core while expanding into new adjacencies across markets where we operate,” Lee said.
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