Universal Robina Corp., the food manufacturing unit of the Gokongwei Group, reduced its revenue growth target for fiscal year 2016, as sales fell in Vietnam where it announced a product recall.
URC said in a recent analysts’ briefing operating income was expected to be slightly lower for fiscal year 2016 compared with the previous fiscal year’s level. URC’s fiscal year begins October and ends September of the following year.
“Given by the unexpected significant decline in Vietnam, we are revising our guidance with topline growing by low to mid-single digit and operating income slightly lower than fiscal year 2015,” URC said.
URC said sales recovery in Vietnam was expected to be slow as the company planned to rebuild the brand in the Southeast Asian country.
This is the second time this year that URC revised the topline guidance.
The company projected revenues to grow by 8 percent to 9 percent at the start of the fiscal year 2016.
The food manufacturing company reduced the sales growth target to 6 percent to 7 percent in May, with operating income projected to rise 10 percent.
Vietnam’s Ministry of Health issued a ruling in the later part of May to recall one batch of C2 Lemon 350 ml (manufactured Feb. 4, 2016) and one batch of Rong Do cup 240 ml (manufactured Nov. 10, 2015), produced in URC Hanoi, one of its four facilities in the country.
The rest of the URC products in Vietnam were not affected by the recall.
URC said net income grew 26 percent in the first nine months of fiscal year ending June 2016 to P12.03 billion from P9.55 million posted in the same period last year.
Consolidated sales of goods and services rose 4.2 percent to P85.37 billion from a year ago. The group’s branded consumer foods segment, excluding packaging division, posted a 2.6-percent increase in sales to P69.73 billion.