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MANILA, Philippines - The company behind Magnum ice cream on Monday said its first-quarter profit rose 30 percent on the back of higher sales and lower production costs.
Concepcion-owned RFM Corp. said its net income reached P130.3 million in the January to March period from P100.1 million in the same three-month period last year.
Sales grew 16 percent year-on-year to P2.4 billion
“The rationalization of production processes and focus on higher-margin products helped improve the profit picture for the company,” RFM said, adding that easing milk and sugar prices in the second half of 2011 helped contain costs.
Jose Concepcion III, president and chief executive of the food and beverage manufacturer, said its ice cream joint venture with Unilever, Selecta, posted grew 37 percent for the quarter.
"This rate would be even higher if we look at March alone year-on-year, since it was the month we introduced the latest ice cream craze Magnum," Concepcion said.
He said demand for Magnum, a Belgian chocolate enrobed ice cream on a stick, has exceeded expectations, adding that inventory has been running low.
“Selecta Cornetto ice cream products have also been doing extremely well, with growth rates of 50-60,” Concepcion said.
RFM’s Fiesta pasta business surged 70 percent, expanding its market share to 30 percent from 25 percent last year. The White King brands of cake mixes - including Arroz Caldo and Champorado - grew 30 percent year-to-date.
“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,” Concepcion said.
"As we become the market leaders in these categories, we are increasing the frequency of consumption and growing the size of the market," he said.
RFM earned a net income of P508.3 million on revenues of P10.3 billion in 2011.
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