MANILA, Philippines – Food manufacturing giant Universal Robina Corporation (URC) earmarked P8 billion in capital spending budget for 2018, mainly to finance the expansion of its branded foods group.
In a filing with the Philippine Stock Exchange (PSE) on Monday, April 16, URC said that of the P8 billion, around P5.5 billion will be for expansion of capacities and improvement of handling, distribution, quality control, as well as operational efficiencies throughout the branded foods group.
Another P1.5 billion will be allocated for the commodity foods group for flourmill and pasta manufacturing equipment, as well as sugar business expansion, among others.
The remaining P1 billion will be for the agro-industrial group's sow level expansion, new commissary and processed meat plant, feedmill capacity expansions, farm improvements, and handling facilities for the feeds division.
URC earmarked slightly lower capital expenditures this year, compared with the P8.13-billion actual spending in 2017, which was primarily used for site development and building construction as well as the upgrade of beverage and snacks facilities in the Philippines.
Decline in net income
Last year, URC saw a 15.4% decline in net income to P10.8 billion, from P12.8 billion in 2016, as costs and expenses grew faster than revenues.
URC's consolidated net revenues in 2017 climbed 11% to P125 billion.
Sales from domestic operations also slightly declined to P59.18 billon in 2017, mainly due to lower volume and unfavorable mix in the coffee category, which dragged the sustained growth performance in snacks and the recovery of ready-to-drink beverages.
International sales, meanwhile, increased by 30.1% to P42.87 billion in 2017 due to the full-year consolidation of Snack Brands Australia (SBA) and growth from Thailand and Malaysia, which were partly offset by Vietnam's slower than expected recovery.
Cost of sales also rose 12.2% to P85.6 billion in 2017, from P76.4 billion in 2016, mainly coming from the effect of SBA's full-year consolidation. – Rappler.com