Universal Robina Corp., the biggest snack food maker, posted a net income of P6.8 billion in the first nine months of 2018, down 17 percent from P8.21 billion year-on-year, on lower operating income and foreign exchange losses arising from the weaker peso.
URC said in a disclosure to the stock exchange net sales rose three percent to P95.5 billion during the nine-month period.
Operating income decreased 6.4 percent to P10.08 billion from P10.76 billion reported in the same period last year as cost of sales rose 3.8 percent to P66.55 billion.
The company also booked a net foreign exchange loss of P244 million for nine months of 2018, a reversal from a gain of P768 million in the same period last year, due to the combined effects of the depreciation of local currencies of international subsidiaries and the Philippine peso against the US dollar.
“The environment remains to be very challenging with macro-economic pressures especially in the Philippines. The weaker peso and inflation continue to affect our conversion and operating costs, thus margins are continuously affected,” URC president and chief executive Irwin Lee said.
“We will be proactive and look for opportunities to manage our portfolio better and implement plans and programs to mitigate the effects to our top line and bottom line in the near term,” he added.
The company has three core businesses—branded consumer foods group (BCFG), agro-industrial products and commodity food products.
BCFG registered sales of P76.16 billion in the first three quarters of the year, up 1.7 percent from a year ago, boosted by international sales.
BCFG’s domestic operations declined to P43.43 billion in the first nine months of the year from P43.69 billion for the nine months of 2017.
The international operations, meanwhile, reported a 4.8-percent increase in net sales to P32.72 billion, mainly driven by Vietnam and Australia.
Vietnam net sales grew on the back of consistent growth in C2 and the strong performance of Rong Do, plus the contribution of snack foods, while the Australian sales growth was driven by the solid performance of Nice & Natural. Malaysia and Indonesia also contributed to higher net sales with the consistent performance of snacks and chocolates.
URC posted net income of P1.98 billion in the third quarter, up 1.5 percent.