RFM profit surges 30% to P130 million in first quarter
MANILA, Philippines - Sales of Magnum ice cream have been "spectacular" since it debuted in March, according to RFM Corp. whose Selecta joint venture with Unilever introduced the premium ice cream brand to the Philippines.
This comes as the Concepcion-led food and beverage company on Monday reported 30% jump in net income to P130.3 million in the first quarter of 2012. This was better than RFM's net income of P100.1 million in same period last year.
RFM attributed improvements in profit to higher sales revenues and easing of prices of commodities such as milk and sugar. The rationalization of production processes and focus on higher-marging products also contributed to the higher net income.
RFM reported P2.4 billion in sales in the January to March period, 16% higher than the previous year.
Selecta, RFM's joint venture with Unilever, saw a "spectacular" sales growth of 37% in the first quarter.
RFM president and CEO Jose A. Concepcion III said the sales of Selecta soared in March, when Magnum was introduced in the Philippine market.
"The rate would even be higher if we look at March alone year-on-year, since it was the month we launched the latest ice cream craze Magnum (Belgian chocolate enrobed ice cream on a stick)," he said.
He added demand for Magnum has been "way beyond expectation", and stocks have been running out.
Magnum created a lot of buzz in social media when it first launched, thanks to its brand ambassadors, stylist Liz Uy, actress Solenn Heussaff, magazine editor Raymond Gutierrez and designer Rajo Laurel. The premium ice cream brand comes in three flavors: vanilla, almond and chocolate truffle, and priced between P50 to P60 a piece.
Selecta's Cornetto ice cream products have been doing well, with 50% to 60% sales growth in the first quarter.
Aside from ice cream, RFM saw strong performance from its Fiesta pasta business with 70% growth. Concepcion said Fiesta pasta, which offers affordable prices, now has 30% market leadership.
Other White King brands of cake mixes, Arroz Caldo and Champorado have also shown sustained sales momentum, 30% year-to-date growth.
"We believe that stronger brand equity and product innovations have influenced the shift in buying pattern and frequency in a number of categories we participate in. As we become the market leaders in these categories, we are increasing the frequency of consumption and growing the size of the market," Concepcion said.
Sales of Selecta milk, Sunkist litro pack, Swift Mighty Meaty and Corned Beef Swak also performed well in the first quarter of 2012. The company attributed the sales performance to product repackaging, aggressive merchandising and other trade-related programs.