URC’s FY2014 Net Sales Hit PhP92B
Quezon City—(PHStocks)—Universal Robina Corp. (PSE: URC) ended the fiscal year 2014 (beginning October 2013 and ending September 2014) with PhP92.376 billion in net sales, a growth of 14.1% versus the previous year. BCFG Philippines was the main driver of the growth as net sales increased by 24.1% while BCFG International managed to post a growth of 7.8%. Non-branded consumer foods group net sales declined by 2.9% due to lower sugar volumes.
Operating income for fiscal year 2014 amounted to PhP14.119 billion, a growth of 37.4% versus last year. Operating income margins continued to expand in fiscal year 2014 by 259 bps versus last year due to lower average prices of commodity inputs, managed operating expenses, and additional scale for branded foods.
URC’s net income for fiscal year 2014 amounted to PhP11.655 billion, which was higher than last year by 15.2%. Growth was slower than operating income as the Company booked lower non-recurring gains as most of our bond and equity holdings were liquidated in the prior year.
The Company remains financially healthy as it maintained strong cash levels. For fiscal year 2014, URC was in a net cash position of PhP1.834 billion with a gearing ratio of 0.16. The Company paid dividends of PhP6.545 billion, which was 65% of previous year’s reported income. Capital expenditures amounted to PhP7.697 billion with additional investments in new facilities and capacities across our branded foods business, bio-ethanol facilities and biomass cogeneration.
The sales performances per business are as follows:
The branded consumer food (BCF) group, excluding the packaging division, increased sales by 18.5%. Sales for fiscal year 2014 were at PhP76.128 billion.
BCF Philippines ended the fiscal year with PhP52.352 billion in net sales, a 24.1% growth versus last year. All segments contributed to the growth led by the beverage division, which managed to grow by 38%. The growth in beverage sales was driven by double digit growth from URC’s powdered beverage business, led by coffee, and from URC’s RTD business, led by tea. Snack food sales grew by 16% as salty snacks, bakery, and confectionery segments all posted growth.
BCF International posted a 7.8% growth in net sales, which amounted to PhP23.776 billion for the fiscal year 2014. The sales growth was driven by Thailand and Vietnam. Thailand managed to grow despite weak consumer sentiment brought about by its macro-political issues. URC launched more affordable products (smaller pack sizes for biscuits) as well as implemented continuous promotional campaigns. Vietnam posted modest growth, bucking the decline in the country’s total fast moving consumer goods (FMCG) industry, as new product offerings gained traction. URC Vietnam was also able to protect market share from new entrants by launching C2 Oolong. C2 continues to be the number one brand for RTD Tea in Vietnam. Indonesia continues to show promise with core snack foods growing at 11%. Sales of URC’s brands such as Piattos and Cloud 9 continued to be robust and the Company has implemented strategies to improve distribution and coverage with focus on major cities and key accounts.
URC’s non-branded consumer foods business, which is composed of the commodity foods group and the agro-industrial group, posted net sales of PhP15.142 billion for the year, as sales declined by 2.9%. This was driven by the commodity foods group declining by 15.4% versus the previous year, with sales of PhP6.939 billion. While the flour business grew by 4.8% due to higher volumes, the sugar business posted a decline of 34.1% due to lower sugar volumes. URC’s agro-industrial segment ended fiscal year 2014 with PhP8.203 billion in net sales, an 11% increase versus the previous year. Growth was driven by the farms business, which increased by 11.2% due to higher average selling prices and growing carcass business. The feed business also improved by 10.6%.