RFM Corp. said business has improved in the second quarter of the year, leading to a 5 percent growth in profit in the first half.
Preliminary figures showed net income stood at P611 million from P581.9 million a year ago.
Sales reached P7 billion, up 2 percent.
Jose Ma. Concepcion III, RFM president, said “while the first quarter 2020 income slowed by 4 percent and revenue growth was only at 3 percent, second quarter 2020 performance reflect sustained sales growth in milk, pasta and sauces with improving topline for ice cream and institutional sales.”
“Consumer eating behavior during the lockdown has shifted food demand towards more nutritious food cooked at home. Our Selecta Fortified Milk, Fiesta and Royal pasta & sauces have benefited from this change in behavior. We also saw a surge in demand for hotcake and other mixes of our White King line,” he added.
Concepcion said RFM’s challenge during the lockdown was “how to keep the production lines running to meet demand.”
RFM’s ice cream business and bread sales to industrial clients suffered as a result of the lockdown, it has been “quickly recovering with the lifting of the ECQ.”
“Taken alone, RFM’s pasta, milk, sauce and White King sales for the first half of 2020 showed 18-percent growth and with improving ice cream sales, we can expect total RFM topline to post better growth in the coming months,” Concepcion said.
Concepcion said as a result of the uncertainty created by the pandemic, RFM has tightened its expenses and capex spending to conserve liquidity and maintain profitability in light of changing consumption patterns.
RFM Wednesday announced a P366 million cash dividend, or P0.1060 per share, payable on September 10, 2020 to shareholders as of record August 13, 2020.
This brings RFM’s total dividend per share for 2020 to P0.212 per share or a dividend yield of 4.99 percent at the 4.25 per share price, Concepcion said.
“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. 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,” Concepcion said.
RFM meanwhile said it has set aside P500-million for share buyback.