Listed food and beverage company RFM Corp. said Friday its board of directors approved a P1.2-billion capital expenditure plan to expand the production capacities of its milk, consumer, and institutional businesses and lay the foundation for future growth.
The board also approved a cash dividend of P200 million or P0.059355 per share. Total cash dividends declared by RFM in 2022 would amount to P854 million or 65 percent of its 2021 net income and P0.253626 per share.
It has a dividend yield of 6.5 percent at the P3.9-per-share prevailing stock price. Payment date is Oct. 11, 2022 and record date is Sept. 15, 2022.
RFM is the maker of Selecta Milk, Royal and Fiesta pasta and sauces, White King Mixes, and flour and bread. It is also a 50-percent owner of Unilever RFM Ice Cream joint venture that sells Selecta, Cornetto, and Magnum brands.
RFM chief executive Jose Ma. Concepcion III said “this P1.2-billion capex approval is one of the biggest sets of capex since the purchase of the Royal pasta brand in 2014. On top of the P200-million cash dividends we just declared, we plan to use our excess cash to fund the P1.2-billion capex over the next 15 months. This capex is expected to support the double-digit growth of our Selecta Milk offerings as well as support the growing consumer and institutional businesses that are expected to double in five years.”
RFM reported a 17-percent growth in sales in the first half of 2022, buoyed by ice cream, milk and institutional businesses. Concepcion said the company would double down its support for the milk and other high-growth segments to drive the topline of RFM over the coming years.
“The investment into more production capacity for milk and other high-growth segments will support RFM’s sales growth momentum even as there are uncertainties in the global economy at present. We have been carefully passing on the cost of higher inputs and also tightening on expenses to manage our margins. Our ice cream joint venture is also continually planning expansion to meet volume growth over the long term,” he said.
Concepcion said that, “our strategy of focusing on our core strengths and brands has yielded good topline and bottom line growth over the past years, and we are deploying the extra cash that we have accumulated to further feed into that growth of our core growth drivers.”