URC net income down by P988M as quarantine drags supply operations

Universal Robina Corp. (URC) on Wednesday reported a 31.6% drop in its first-quarter net income, as sales of its branded consumer foods (BCF) declined during the period.

In a regulatory filing, URC said its net income fell by P988 million to P2.137 billion in the first three months of 2020 from P3.125 billion in the same period last year.

This comes as sales of goods and services of its BCF segment, excluding packaging division, decreased by 1.4% or P361 million to P25.412 billion from P25.773 billion.

"BCF segment posted high single-digit growth at the start of the year but momentum was affected by the enhanced community quarantine (ECQ) due to COVID-19, which impacted supply operations," the filing read.

President Rodrigo Duterte first implemented an enhanced community quarantine (ECQ) on March 17, which was initially scheduled to lapse on April 13. This has since been extended twice, and is set to end of May 15.

International BFC operations also reported a 7.8% decrease in net sales to P9.720 billion from P10.544 billion, which the company attributed to foreign exchange devaluations in New Zealand and Australia.

"We started 2020 well, continuing our strong results in 2019 with good sales and profit growth in many of our divisions and geographies. However, as we closed the first quarter in March, our growth momentum was impacted by COVID-19 related disruptions," Irwin Lee, URC president and chief executive officer, said.

"We are also now evolving our operating model to adapt to the 'new' normal. We are fortunate to be in the food industry and in a better situation than other companies amidst this crisis. With a strong balance sheet and healthy cash position, we can weather these short-term challenges and emerge even stronger," he added.—LDF, GMA News