Splash Operating Profit Rises

Taguig–(PHStocks)–Pursuing efficiencies in all aspects of its business, Splash Corp. (PSE: SPH) grew its operating income by 153 percent to PhP47 million for the full year 2014 from PhP19 million in 2013. The growth continued for the first quarter of 2015 with operating income rising 36 percent to PhP58 million from PhP43 million for the same period of 2014.

Sales for 2014 amounted to PhP3.5 billion from PhP3.4 billion in 2013 or a 4 percent increase. Sales for the first quarter of 2015 rose by 15 percent to PhP957 million versus the PhP832 million for the first quarter of 2014.

Net income for 2014 declined to PhP12 million from PhP73 million in 2013. The net income for 2013 included an extraordinary gain of PhP70 million arising from the sale of a non—core asset. Without the extraordinary gain in 2013, net income would have increased fourfold. Net income for the first quarter of 2015, amounting to PhP49 million, was an increase of 46 percent over the PhP38 million in net income for the same period of 2014. Thus net income for the first quarter of 2015 had already exceeded the net income for the whole year of 2014 by more than four times.

Operating profit improved significantly for Philippine Operations and International Operations to PhP288 million and PhP72 million, respectively, in 2014. Food sales continued to be in its investment phase, but as programmed, operating loss was cut in half to PhP77 million. The implementation of a new business model and the focus on network management resulted in an expected operating loss of PhP236 million in Direct Sales.

Sales of Philippine Operations increased by 11 percent in 2014; international Operations by 3 percent; while Food sales were flat. These increases helped offset the 38 percent decline in Direct Sales revenue. For the first quarter of 2015, total sales of the Personal Care segment grew by 18 percent with Philippine Operations contributing 21 percent growth, International Operations 4 percent and Direct sales 5 percent. The growth in sales of personal care products more than made up for the decline by 10 percent of the sales of the Foods segment.

Marketing, Selling and Distribution costs declined by 7 percent mostly as a result of the steps taken in 2013 to strengthen Splash’s relationship with key accounts to ensure more mutually beneficial terms of engagement. These revised terms resulted in more efficient inventory management and promo fund spending for both parties. This expense declined despite a sharp increase in advertising spent for Splash’s flagship brands SkinWhite and MaxiPeel, which helped to drive huge increases in sales and further strengthened their market dominance.

Maxipeel continued its dominance through new packaging and advertising to give the brand a new, younger face. The relaunch of this innovative product showed 30 to 50 times increase in social media activity. Likewise, the advertising for SkinWhite’s Power Whitening variant was phenomenally successful with the product’s promise of whitening in just seven days appealing to consumers.

Splash’s flagship personal care brands continued their strong showing in international markets. Sales in investment markets including Africa, Middle East, and lndo-China increased remarkably by 92 percent, 13 percent, and 2336 percent, respectively.

In Food, several Barrio Fiesta product lines were commercially introduced to the US market including canned meals, specialty vinegars and recipe mixes. In the Middle East, Splash grew its distribution market, resulting in 66 percent growth.

Management of Account Receivables of Direct Sales has improved significantly. The Enhanced Splash Direct Sales On-Line System, to be implemented in the second semester of this year, will enable closer monitoring of all aspects of the operations and transactions of the direct sales network. On top of this, a strategic shift in the Splash distribution model will result in improvements in cost efficiency and working capital utilization.

Splash provides pioneering and high-quality products and services that cater to the universal desire of people to look good and live well. From a leadership position in the Philippines, it is successfully venturing into high-growth markets in Southeast Asia, Africa, the Middle East and North America.