RFM income grows 20% to P211 M in July - Sept

RFM Corp. reported a 20 percent growth in its third quarter income, putting it on track to surpassing its 2016 net income.

In a disclosure, RFM reported a net income of P211 million for the third quarter on the back of a seven percent rise in revenues to P3.16 billion.

RFM president and chief executive officer Jose Concepcion III said Selecta ice cream sales drove the strong third quarter performance of RFM as the country saw relatively less-than-usual wet weather during the period that helped propel ice cream sales.

RFM’s ice cream joint venture with Unilever sells ice cream under the Selecta, Cornetto and Magnum brands, among others.

The pasta business did not grow as much but Concepcion said this would change in the next quarter with the coming Christmas season.

RFM’s revenues from its Royal and Fiesta pasta brands as well as from Selecta Milk and Sunkist juices were flat but with expectations of growth pickup in the fourth quarter as the Christmas selling season begins, he said.

There was sustained increase in the revenues of the company’s private label bread unit that also helped offset the weaker performance of other institutional revenue sources like flour.

Year-to-date income grew 5.27 percent to P719 million.

Concepcion, meanwhile, also cited the recently declared cash dividend of P200 million or P0.057 per share for shareholders as of record date of Oct. 11, 2017.

He said this second cash dividend declaration completes the company’s 50 percent cash dividend on recurring net income.

Early this year, RFM declared and paid P300 million in cash dividends.

“Total cash dividends for 2017 now amounts to P500 million or P0.14 per share,” he said.

Moving forward, RFM is continuing to ensure long term growth momentum with a planned P1 billion capex program for the ice cream joint venture that will ensure adequate production capacity over the long term.

There is also a P250 million capex for RFM’s flour unit over a period of two years to upgrade the flour mills and ensure the competitiveness of the flour brands, Concepcion said.

Incorporated in 1957 as Republic Flour Mills Inc., the company today is a branded food and beverage company known for nurturing and growing heritage local brands like Pop Cola and Sarsi, under its previous subsidiary Cosmos Bottling Corp., and Selecta ice cream.

The company is also known for its major brands White King Fiesta, Selecta Milk, Sunkist and Swift.