Universal Robina FY23 profit: P12.8-B (down 12%)

Universal Robina [URC 41.40 unch] [link], the Gokongwei Family’s consumer foods manufacturer, posted an FY23 net income of P12.8 billion, which was down 12% from FY22’s P13.6 billion which URC said was a “high base” due to the gains recognized on the sale of land. Full-year sales were P158.4 billion (up 6%), operating income was P17.4 billion (up 14%), and core net income was P12.6 billion (up 6%). URC said that its core net income was boosted by “operating income growth”, but “tempered” by the drag of “higher interest rates”.

MB bottom-line: The company operates in low-margin, high-volume markets, so it needs to focus as much on limiting costs and increasing efficiency as it does on selling more product and developing new product lines and markets. This super-short press release cannot capture the nuances of the multitude of battles that URC is fighting, and that’s why URC is one of those annual reports that really requires a thorough reading. The stock is down 10% since the start of the year, down 20% over the past 12 months, and is hovering just off of its 52-week low of P108.10/share. Even before the pandemic, URC was a stock that had a fairly consistent rise and fall through time, but its post-COVID highs have been lower and its lows have been lower and that just doesn’t make for a good-looking chart.

—

Merkado Barkada is a free daily newsletter on the PSE, investing and business in the Philippines. You can subscribe to the newsletter or follow on Twitter to receive the full daily updates.