RFM income up 6% in 2017 on strong pasta, ice cream sales

RFM CORP. reported a 6% profit increase for 2017, boosted by the robust sales of its ice cream and pasta products.

In a statement issued Monday, the listed food and beverage firm said net income increased to P1.064 billion last year, from the P1 billion it generated in 2016.

Sales revenues stood at P12.7 billion, as higher sales of Selecta ice cream and Fiesta pasta during the period helped offset price pressures in the commodity flour business. RFM had earlier noted that it will be ramping up efforts to grow its branded consumer brands to mitigate the effects of increased prices of raw materials.

Ice cream brand Selecta, which RFM developed in partnership with Uniliever Philippines Ltd., saw revenues climb 13% during this period. To support the rising demand for the product, the two companies have earmarked a capital expenditure of P1 billion to grow the ice cream business. Capex will be internally funded by the ice cream joint venture.

“RFM sees continued consumer consumption growth in the coming years and we are investing already to be able to take full advantage of that growth,” RFM President and Chief Executive Officer Jose A. Concepcion III said in a statement.

The company is in the process of upgrading its flour mill using P240 million of internally generated cash. The pasta business also includes the Royal brand, while other products under RFM’s portfolio are Sunkist Orange Pulp, Vitwater, and White King All-Purpose Flour.

“For 2018, we see sustained growth in our ice cream and faster growth in the pasta business. We also plan to push our RTD (ready-to-drink) milk lines for faster growth this year,” Mr. Concepcion added.

The company on Monday also disclosed that it will be giving out cash dividends worth P300 million, which is the first tranche of its 50% dividend payout from its 2017 earnings.

RFM is likewise undertaking a share buyback program worth up to P900 million. As of Feb. 7, the company has already bought back from the open market 102.76 million shares for an aggregate amount of P441.27 million.

Incorporated in 1957 originally as Republic Flour Mills, Inc., RFM’s business is divided into tow segments: the institutional segment for the flour, bakery, and other bakery products to institutional customers, and the consumer segment that manufactures and sells ice cream, milk, juices, pasta, and other rice-based mixes.

Shares in RFM gained four centavos or 0.82% to close at P4.90 apiece at the Philippine Stock Exchange on Monday. —