MANILA - Food and beverage firm RFM Corp. has upgraded its income and revenue targets this year as it expects higher sales of from its branded consumer business units.
The Concepcion-led firm allotted almost P500 million this year for capital expenditures to support plant maintenance and increased pasta production capacity, its top executives said yesterday.
“We are planning to make net income (reach) at least P950 million, if not P1 billion in 2014,” Felicisimo M. Nacino Jr., RFM executive vice-president and chief operating officer, said during the company’s annual stockholders meeting.
“In terms of topline, we expect not only to arrest the slide we experienced last year but to record a surge. We are looking at generating at least P12 billion in consolidated sales in 2014,” he added.
In 2013, net income of RFM, the maker of Selecta ice cream and Fiesta pasta, jumped 18 percent to P805 million from P682 million the previous period while consolidated sales fell 6.69 percent to P10.3 billion from P10.99 billion as it unloaded its meat business to the Century Pacific Group.
Early this year, RFM announced its target of roughly P900 million in net income amid the recovery in consolidated sales.
“We are counting on the branded consumer businesses like Selecta and Royal to lead the growth,” Nacino said.
Selecta, RFM’s joint venture with Anglo-Dutch consumer goods giant Unilever, already corners 74 percent of the local ice cream market.
“We remain confident in the combined strength of both Fiesta and Royal, as these brands continue with their product innovations and marketing campaigns to grow the category, while addressing the various aggressive marketing and pricing moves of other competing pasta brands,” said RFM president and CEO Jose Ma. A. Concepcion.
RFM vice-president Ramon M. Lopez said the company will spend P300 million for plant maintenance and another P175 million to P180 million that forms part of a P350-million expansion of its pasta production line.
RFM spent P650 million last year for plant maintenance and the improvement in its macaroni line.
“The capacity of the spaghetti line is maxed out already so we need a second line for spaghetti to cater to volume requirements of Royal,” Lopez said.
Early this year, RFM strengthened its foothold in the pasta segment with the acquisition of the Royal brand and pasta business of the Unilever Group for P2.1 billion.
It allowed RFM’s share in the pasta market to improve to more than 50 percent, Concepcion said, adding that it was a “must-win” bid.
In the first quarter this year, RFM’s earnings rose 8.4 percent to P167 million from P154 million while sales revenues inched up to P2.24 billion from P2.22 billion as better margins offset the timid growth in sales.
Aside from Royal, Fiesta and Selecta, RFM is also the firm behind White King cake and sauce mixes, and Sunkist beverages.