MANILA: Philippine snack maker Universal Robina registered a slight dip in foreign sales for the nine months through June, after two of its beverage brands were entangled in a food safety scandal in Vietnam.
Overseas sales of its branded consumer foods, which include wafers, chips, cookies and drinks, slid 0.76% on the year to 24.65 billion pesos ($529 million) owing to “regulatory issues encountered in Vietnam, which affected both sales and profitability,” the company said Friday. Universal Robina’s fiscal year runs from October to September.
In June, CEO Lance Gokongwei said a batch of C2 lemon-flavored tea and Rong-Do energy drink produced last year was recalled in Vietnam for breaching that country’s lead content standards. The issue was first reported by Vietnamese media in May, sparking a barrage of negative publicity on social media targeting the company’s beverage products, especially C2, which is popular in Vietnam.
International sales make up just over a third of revenue in Universal Robina’s branded consumer food segment. Still, sales in the segment went up 2.57% to 69.73 billion pesos, driven by demand in the Philippines, where a national election in May buoyed consumer spending.
The branded consumer food segment, meanwhile, accounted for four-fifths of Universal Robina’s total sales, which improved by 4.19% to 85.37 billion pesos. Revenue in nonfood businesses, such as animal feed and packaging, rose 12.8% to 14.8 billion pesos.
Net profit for the nine-month period climbed 26.4% to 12.2 billion pesos, partly due to extraordinary foreign exchange gains. In the first six months, profit surged 28.97%.
Furthermore, the company had warned about slower sales early this year, citing “the challenges that affect consumer sentiment and overall demand,” such as inclement weather due to the El Nino phenomenon, slowing growth in remittances from Filipino expats overseas, and the shaky recovery of the Thai economy — one of the company’s major overseas markets.
