RFM Corp.'s Q1 earnings up 18%, but sales down 8%

Concepcion-led RFM Corp. grew its first quarter earnings by 18 percent to P153.7 million, exceeding its internal target for the period. Sales, however, fell eight percent to P2.4 billion, largely due to the disposal of its meat business last year, RFM said in a statement Tuesday. RFM president and CEO Jose A. Concepcion III said the growth was attributed to better margins in their core businesses.   "The lower commodity input costs this year such as for sugar and wheat were important in keeping the cost levels down as well as better yields due to scale economies as we reach high levels of production especially for Selecta ice cream and Fiesta plant," he said. With stronger cash flows from its business units and the proceeds from the sale of its meat business, RFM prepaid its P1.1 billion long-term loans last January, bringing down its debt ratio to all time low levels. "Stronger consumption spending is expected as the year progresses with continuous economic growth, but we expect the impact to be felt more in the second and fourth quarters," Concepcion said. Concepcion said consumer products like Sunkist beverage and segments in their Selecta ice cream and milk, as well as Fiesta pasta and White King cake mixes and sauces, have already posted encouraging growth. For other product segments, the first quarter sales seem to be still adjusting from relatively higher trade stocks in the fourth quarter last year, which experienced rapid growth from aggressive marketing campaigns compared to previous periods. "For RFM, we remain bullish on the market leadership of our core brands Selecta and Fiesta as we introduce more product innovations and build-up brand equity," Concepcion said. — KBK, GMA News