FOOD and beverage manufacturer RFM Corp. posted 4% lower earnings in the first quarter due to a decline in sales from its ice cream and institutional food product segments.
The listed Concepcion-led company reported Wednesday its attributable net income slipped to P212 million from P221 million last year.
The coronavirus disease 2019 (COVID-19) pandemic brought mixed results to its performance, as sales from ice cream and institutional flour products declined because of quarantine measures in parts of the country.
But the same quarantine measure drove up the company’s sales for its milk, pasta, hotcake, champorado and arroz caldo products, as people were locked in their homes and forced to prepare their own food.
RFM’s revenues stood at P3.2 billion at the end of the three months, up 3% from a year ago. Its direct costs and expenses grew 6% to P2.07 billion while general and administrative expenses climbed 9% to P169 million.
“Prior to the lockdown, we saw strong growth across most units. However, the lockdown affected our ice cream sales, especially in the out-of-home segments as consumers were restricted to their homes,” RFM President and Chief Executive Officer Jose Ma. A. Concepcion III said in a statement.
“On the other hand, the stay-at-home situation shifted more buying to our Selecta Milk, Royal and Fiesta Pasta and sauces, as well as White King hotcakes, champorado and arroz caldo. Institutional bread and flour sales were hit by closures of fastfood outlets,” he added.
The sudden rise in demand for the company’s packaged products led to challenges in production and supply chain, as its manpower had to be limited to observe social distancing measures.
Given that the second quarter would account for more weeks of quarantine, Mr. Concepcion said RFM is likely to post lower profits this period.
“The limited mobility and spending power of consumers will bear down on the sales of ice cream and institutional sales to fastfood outlets even as milk and pasta will see sustained demand,” he said.
RFM will be trimming its capital expenditures for the year and will be reconfiguring expenses to cope with challenges from the pandemic.
“We continue to observe and adapt to the new reality… We would need to continue the collaboration of the private and public sectors in ensuring our workers have food on their table and have work to come back to when more economic activities are allowed,” Mr. Concepcion said.
Shares in RFM at the stock exchange fell 29 centavos or 6.44% to P4.21 each on Wednesday. — Denise A. Valdez