Universal Robina Corporation (URC) recorded net income of Php11.2 billion in the nine months of calendar year 2021 ending September. This is 38% higher versus results for the same period last year, driven by continuing benefits from the Comprehensive Recovery and Tax Incentives for Enterprises (CREATE) Act and gain on sale of idle land.
URC sales for the nine months ending September 30, 2021 posted growth of 3% to reach Php102.6 billion in spite of COVID related constraints in key markets affecting consumer demand. Operating income, on the other hand, continues to be challenged by higher input costs and production inefficiencies brought about by COVID related supply disruptions in several markets. However, higher pricing and cost savings initiatives helped reduce impact to margins.
In addition, URC disclosed the completion of its divestment of its Oceania business, with the transaction closing on October 29, 2021. URC expects to realize an additional one-time gain in 2021 of approximately US$250 million for this sale.
SALES PERFORMANCE PER BUSINESS
Branded Consumer Foods (BCF): Sales of domestic and international branded consumer foods amounted to Php78.3 billion, growing 1% vs. same period last year. Domestic revenues declined -5% vs. last year to close at Php 44.2 billion, as 2020 included a higher base from pantry-loading and consumer demand in the Philippines remain depressed. Third quarter results in the Philippines, however, improved compared to the first half of 2021. In contrast, the International division’s growth momentum in the third quarter was disrupted by the COVID delta variant spikes across the ASEAN region. For the nine months ending September 2021, International revenues were still up by 9% to hit Php32.9 billion, with Indo-China and Indonesia leading the growth.
Agro-Industrial & Commodities (AIC): Sales of Agro-Industrial & Commodities division grew by 9% versus last year to hit Php24.2 billion, driven by the Commodity Foods Group’s strong performance of +20%. The Agro-Industrial Group’s sales were down by 7%, an improvement from prior quarter’s performance, as the strategic downsizing of hog farms concluded in mid-2020. URC’s pet food business continues to grow, offsetting lower volumes of other animal feeds.
URC REMAINS STEADFAST
Irwin Lee, URC President and CEO, said, “We find ourselves in unprecedented times, challenged on all fronts, with muted market conditions and immense cost pressures. However, we continue to meet these challenges head-on, backed by strong brands that provide value to our consumers, and the strength and resilience of our employees and partners. As the vaccination rollout across the region speeds up, it is only a matter of time before consumer sentiment improves and we resume our strong growth trajectory.”