Food and beverage company RFM Corporation reported a marked upswing in its first quarter 2012 income, registering P130.3 Million profit, or 30% higher than its first quarter 2011 income of P100.1 Million.
Its income gathered momentum this year given the higher sales revenues and easing of commodity cost inputs such as milk and sugar that started in the second half of last year. Rationalization of production processes and focus on higher- margin products helped improve the profit picture for the company.
Sales of P2.4 Billion likewise registered faster growth of 16% for the first quarter. RFM President and CEO Jose A. Concepcion Ill explained that Selecta, its ice cream joint venture with Unilever, posted spectacular sales growth of over 37% for the quarter. "This rate would be even higher if we look at March alone year-on-year, since it was the month we introduced the latest ice cream craze Magnum (Belgian chocolate enrobed ice cream on stick)." Concepcion added that demand for Magnum has been way beyond expectations and stocks have been running out, thus the company is making arrangements to increase further supplies. Selecta Cornetto ice cream products have also been doing extremely well, with growth rates of 50-60%.
RFM's Fiesta pasta business has also been performing very well with over 70% growth, thus expanding its market leadership position to over 30%, from 25% last year, according to Concepcion. The consistently firm pasta quality at affordable pricing levels made Fiesta more preferred nowadays than the traditional leading pasta brand. Moreover, its other White King brands of cake mixes and Arroz Caldo and Champorado have also sustained stronger sales momentum of 30% YTD growth.
"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 leaders in these categories, we are increasing the frequency of consumption and growing the size of the market.
RFM reported that aside from Selecta ice cream and Fiesta pasta, sales of Selecta milk, Sunkist litro pack and Swift Mighty Meaty and Corned Beef Swak also performed very well. These came about as the company rationalized and focused its brand portfolio, supported by more exciting product repackaging, aggressive merchandising and trade-related programs.
RFM further disclosed the result of its recently-concluded audit of financial statement for full-year 2011. Highlights of financial performance showed a net income of P508.3 million, on back of P10.3 Billion sales revenues which was up 13.6% over the previous year.
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