RFM Corp., the food and beverage company of the Concepcion family, sees net income and revenues rising by double digits this year on weak inflation rate, lower cost of raw materials and stronger peso against the dollar.
RFM chief finance officer Enrique Oliver Rey-Matias said in a recent interview the company was expecting profit to grow by at least 10 percent and top line revenues to increase by 10 percent to 12 percent this year.
“For this year, top line revenues are expected to hit 10-12 percent. But with strong growth of milk business, sales could grow over 12 percent. For net income, we may hit double-digit growth for 2019 compared to last year which was only six percent growth,” said Rey-Matias.
“Oil prices seem to be stabilizing and inflation is slower which could boost consumption. Forex will also help because we import a lot,” he added.
Foreign exchange accounts for 40 percent to 50 percent of the company’s total costs. It imports wheat for the flour business and milk for milk products.
RFM posted a net profit of P580 million in the first six months of 2019, up 10.5 percent from P525 million year-on-year.
First-half revenues rose 10.3 percent to P7 billion from P6.3 billion on year.
The company this year is spending up to P400 million to expand the capacities of its spaghetti sauce and milk businesses. This year’s capital spending is significantly lower than P1.41 billion in 2017 after the company completed the expansion of its ice cream business.
Rey-Matias said the P1.1-billion expansion boosted production of the ice cream business by 40 percent.
RFM earlier obtained the approval of the Securities and Exchange Commission to merge with three subsidiaries, namely Cabuyao Logistics Industrial Corp., Interbake Commissary Corp. and Invest Asia Corp. The merger is expected to increase efficiency in overall operations and lessen administrative expenses.
RFM’s ownership in the three subsidiaries ranged between 96 percent to 100 percent before the merger plan.
