URC Q1 earnings pressured by lower sugar selling prices

GOKONGWEI-LED Universal Robina Corp. (URC) reported a 2% decline in first-quarter (Q1) core net income as lower sugar selling prices weighed on commodities profits despite higher sales from its branded food business.

In a statement on Thursday, the listed food and beverage manufacturer said core net income attributable to parent fell to P3.8 billion in the January-to-March period, broadly in line with the decline in operating income.

Total operating income declined 2% year on year to P5.4 billion as commodities profits were affected by lower sugar selling prices. Net income from continuing operations also fell 4% to P4.1 billion.

Quarterly sales rose 6% to P47.9 billion, driven by broad-based, volume-led growth in Branded Consumer Foods (BCF) Philippines, along with strong contributions from the Animal Nutrition and Health (ANH) and Flour divisions.

URC said its new Sariaya flour mill also “contributed meaningfully to production” during the period.

“We started the year with strong, volume-led growth, led by BCF Philippines, reflecting accelerating momentum and continued excellence in execution,” URC President and Chief Executive Officer Irwin C. Lee said.

“We are balancing targeted demand support with margin recovery,” he added.

Mr. Lee also said the company is monitoring risks from geopolitical tensions in the Middle East.

“We remain mindful that any inflationary spillover from the Middle East conflict could pressure consumer demand, and we will stay agile — managing pricing, mix, and costs carefully to sustain momentum,” he said.

During the quarter, BCF sales increased 9% to P32.2 billion. BCF Philippines grew 10% to P22 billion on broad-based volume expansion and the carryover benefit of last year’s pricing actions.

International BCF sales rose 6% to P10.2 billion, led by Malaysia amid continued demand for Munchy’s products.

Meanwhile, Agro-Industrial & Commodities recorded flat sales of P15.7 billion during the quarter.

URC said growth in the segment was driven by a 22% increase in Animal Nutrition and Health and a 17% rise in Flour as Sariaya production ramped up.

These gains were partly offset by weaker performance in the sugar and renewables business due to lower distillery utilization rates.

On Thursday, URC shares rose by 0.81% to P62 each. — Alexandria Grace C. Magno