RFM Corp. saw its profit surge by 14% to P1.2 billion in 2023, driven by robust sales, the listed food and beverage company said on Wednesday, citing its preliminary unaudited net income report.
In a regulatory filing, RFM said that its 2023 net income marked an improvement from the P1.07 billion net income in 2022, attributed to higher margins resulting from improved cost of raw materials like wheat and milk.
Sales in 2023 increased by 7% to P20.7 billion because of higher demand in the milk, pasta, flour, ice cream, and bread categories, the company said.
“The hefty raw material price increases seen in 2022 and early 2023 reversed through the year and helped RFM margins to recover although inflation dampened consumer demand to an extent,” RFM Chief Executive Officer Jose Ma. A. Concepcion III said.
The company has allocated P1.5 billion as a capital expenditure (capex) budget for projects in its breadline and milk categories.
“RFM continues to invest in its future growth as it completes this first quarter of 2024 important capex projects in breadline and milk totaling P1.5 billion,” Mr. Concepcion said.
“This capex, alongside the regular payment of dividends, were all funded by internally generated cash and RFM parent company has no bank loans,” he added.
The company, he also said, expects “continued growth in top line and single digit growth in income” for 2024.
“There is greater competition in the ice cream sector but improvement in margins is seen on most business segments with the softer prices of raw materials coming in 2024 compared to early 2023,” he said.
“Our Selecta Milk brand is also seeing sustained growth over the years and we are supporting this with new capex and innovations, like what we are also doing with our new Fiesta carbonara sauce,” he added.
Shares of RFM closed unchanged at P2.90 apiece on Wednesday. — R.M.D. Ochave