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RFM net income down 18.5% last year due to costlier commodities

HIGHER input costs pulled down RFM Corp.’s net income in 2022 by 18.5% to P1.06 billion, the listed food and beverage company disclosed on Thursday citing preliminary unaudited figures.

In a press release, RFM Chief Executive Officer Jose Ma. A. Concepcion III said the lower income resulted from higher costs of wheat, milk and sugar as well as bigger electricity charges.

“RFM made a conscious effort not to fully pass on the higher costs of commodities and power to the consumers as it wanted to avoid demand contraction that could be inimical to sales in the long run,” he said.

The profit slide, from P1.3 billion in 2021, comes despite sales expanding by 15% to P19 billion.

“[This] is on the back of both volume and price increases in RFM’s ice cream, milk and institutional segments,” the firm said.

For 2023, RFM has taken a positive outlook as it expects its Royal and Fiesta brands to continue to strengthen leadership in the pasta and sauce market.

“Our Selecta Milk hopes to sustain the double-digit growth over the years with more innovations. Our ice cream joint venture with Unilever is a big anchor for our top line and bottom line over the years and shall continue to be so in the future,” Mr. Concepcion said.

Meanwhile, the company said that its board of directors approved a cash dividend of P350 million or P0.104 per share. The dividend is payable in February, with a record date of Jan. 19.

According to the firm, the declared cash dividend is 33% of its 2022 unaudited 2022 net income and is one of the dividend declarations it makes every year with a usual total cash payout of 60% of net income.

“We continue to declare our usual dividends as we have a very strong balance sheet with no parent company bank loans even with the recently-approved and internal cash-funded big-ticket [capital expenditure] projects,” said Mr. Concepcion.

At the stock exchange, shares in the company closed unchanged at P3.60 each. — Justine Irish D. Tabile

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