Shift to home-cooked meals boosts RFM income in H1

Food and beverage company RFM Corp. said its income in the first half rose 5 percent to P611 million, from last year’s P580 million, mainly due to the changes in consumers’ eating habits.

Revenues were flat at P7.09 billion for the six-month period ending June, from last year’s P6.96 billion.

“Consumer eating behavior during the lockdown has shifted food demand towards more nutritious food cooked at home. The challenge during the lockdown was how to keep the production lines running to meet demand,” the company said in its report.  “The slowdown in ice cream in the lockdown period, as well as bread sales to fast food and industrial clients, has been quickly recovering with the lifting of the ECQ [enhanced community quarantine].”

The company said its milk, pasta and sauces benefited from this change in behavior. The company also saw a surge in demand for hotcake and other mixes of the White King line.

Sales of RFM’s pasta, milk, sauce and White King in the first half grew 18 percent and with improving ice cream sales, RFM said it expects total topline to increase in the coming months.

For the second quarter alone, RFM said its income growth was much higher at 11 percent to P399 million, from last year’s P359 million. Revenues, however, were still flat at P3.87 billion, from P3.84 billion last year.

RFM also declared a cash dividend of P366 million, or P0.1060 per share payable on September 10 with record date as of August 13. Total dividend per share for 2020 is now P0.212 per share, or a dividend yield of 4.99 percent at the P4.25 per share price.

The company said its board approved another P500 million for its continuing share buyback program.

“This second payment of dividends out of the 2019 income of P1.23 billion completes the planned 60 percent payout rate totaling P737 million, higher than the usual 50 percent payout,” RFM President and CEO Jose Ma. A. Concepcion III said.

“Despite the Covid-19 impact on economic activities, RFM’s balance sheet and cash position remained strong and allowed the continuation of dividend payments and the share buyback.”

In light of the uncertainty created by the pandemic, Concepcion said RFM has limited its expenses and capex spending to conserve liquidity and maintain profitability in light of changing consumption patterns.

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