RFM Corp. says Jan.-May net income up sevenfold

RFM Corp. said Thursday its net income grew sevenfold to P320.8 million in the first five months from a year earlier, prompting the company to raise its 2010 earnings forecast to P700 million. "This income growth momentum should bring us the about P400 million by the first half of 2010, well on the way to surpassing our original P500 million target for the full year," RFM President and CEO Jose A. Concepcion Jr. said during the company's shareholders' meeting. Mathematically, the company, whose shares are trade on the Philippine Stock Exchange, could earn as much as P800 million in net income for the year, it is adopting a conservative stance by recasting the target to between P600 million and P700 million, Felicisimo Nacino Jr., RFM’s executive vice president, said. Revenues likewise are expected to grow from P8.3 billion to P9 billion year-on-year. According to Nacino, the company's growth for the year would largely come from its ice cream and pasta products, the leaders in the respective market segments. Selecta, the ice cream brand venture with Unilever, is expected to account for 40 percent to 45 percent of revenue. The brand accounts for 59 percent share of the Philippine market. "Selecta will become an increasingly important contributor to the top-line and bottom-line numbers for RFM," Concepcion said. Pasta brand Fiesta, Selecta milk, and Swift meat groups are expected to expand overall sales this year. The RFM board has decided to adopt a regular cash dividend policy by allotting 30 percent of its recurring income for annual distribution to shareholders starting 2010. "We wanted to send a clearer signal to our shareholders and investors that will allow them to evaluate their investment returns. We wanted to be consistent in meeting our performance targets and giving a fair return to our shareholders and investors," Concepcion said. The company also allotted P900 million for capital expenditures to expand its ice cream business and rehabilitate of existing manufacturing plants. —With MR Gavin/VS, GMANews.TV