Universal Robina Corporation (URC) posted net income of Php 8.1 billion in the nine months of calendar year 2020, ending September. This is a +12% increase versus same period year ago, driven by higher operating income, lower debt and interest expense, and lower foreign exchange losses.
URC sales for the nine months ending September 30, 2020 reached Php 99.8 billion, +2% versus year ago on a constant currency basis and at par versus year ago on a reported-peso basis. The pandemic has deteriorated trading conditions, and resulted in market contractions, in several snack food and beverage categories the company competes in. Despite these challenges, URC has gained significant market shares and performed ahead of the market. While holding ground in sales, URC operating income increased +8% to Php 11.9 billion behind better cost management and favorable input prices, offsetting investments in brand building and close to Php 300 million of COVID-19 related expenses to safeguard people and support business continuity.
URC’s financial position remains strong, with Php 15.9 billion of cash balance, and gearing ratio remaining low at 0.39x. Net debt also improved, amounting to Php 20.9 billion, a Php 8.3 billion improvement versus a year ago.
SALES PERFORMANCE PER BUSINESS
Branded Consumer Foods (BCF): Sales of domestic and international branded consumer foods reached Php 77.4 billion. Domestic revenues of Php 46.5 billion were up +1%, with growth in Powdered Beverages, Snacks, Biscuits and Chocolate offset by double-digit declines in Candies, Ready-to-Drink Beverages and the Food Service channel. URC increased market shares in all key categories. International revenues of Php 30 billion were flattish on a constant currency basis and declined -7% in peso terms, with growth in Oceania offset by the negative impacts of COVID-19 in several ASEAN markets.
Agro-Industrial & Commodities (AIC): Sales of Agro-Industrial & Commodities businesses reached Php 22.3 billion, a +9% increase versus last year. The Commodities Foods Group remained buoyant with revenue growth of +25%, with Sugar & Renewables (SURE) growing +31% and Flour growing +11% versus the same period the previous year. These were offset by Agro-Industrial Group’s sales decline of -7%, due to lower volumes in hogs resulting from its downsized operations. At the end of September, URC completed the acquisition of Central Azucarera de La Carlota and Roxol Bioenergy Corporation from Roxas Holdings, Inc.
URC BEATING THE TREND
Irwin Lee, URC President and CEO, said, “The current environment continue to pose severe challenges to the business. Weaker consumer sentiment and slowing retail sales in Q3, plus sluggish macroeconomic fundamentals, are weighing on a slower path to market recovery. Despite these challenges, we remain focused on operational excellence, business transformation, and investing in building stronger brands and innovation to fuel growth. This focus is helping us perform ahead of market trends. More importantly, this enables us to continue supporting and partnering with our customer and suppliers to serve the needs of our consumers and communities in this time of crisis."
