Absence of election spending drags Pepsi Cola PH’s income

MANILA, Philippines – Softdrink maker Pepsi Cola Products Philippines Incorporated saw its net income drop by 42% in the first quarter of the year compared to the same period last year, height of the election campaign.

Pepsi Cola told the Philippine Stock Exchange that it registered P92.9 million in net income in the first 3 months of 2017, from P159.2 million record in the same period last year. Its 2017 first quarter gross sales stood at P8.1 billion, which is the same as last year’s level. 

“The company was able to maintain sales revenue at last year’s level despite overlap of election-related spending which was present during last year’s national election and market competitiveness,” Pepsi Cola said in the disclosure.

Carbonated soft drinks accounted for P5 billion of total gross revenues followed by non-carbonated beverage with P1.7 billion. The company’s snack business meanwhile contributed P48 million to total revenues.

Cost of sales was slightly lower by 2% at P5.3 billion from P5.4 billion in 2016 as a result of lower sugar prices as well as productivity initiatives resulting in gross profit of P1.5 billion. (READ: Beverage makers: Soft drink tax to ‘burden’ consumers)

Pepsi Cola said management continued to invest in operating expenses ahead of revenue for future growth and thus operating expenses grew 3% to P1.37 billion versus same period last year.

Capital expenditure in the first quarter of 2017 amounted to P900 million as the company continues to invest in capacity and containers.

“Management believes in the long-term health of the business and thus continued to invest in capital expenditures and cost ahead of revenue,” the softdrink maker said.

PCPPI is a licensed bottler of PepsiCo Incorporated and Pepsi Lipton International Limited, as well as a licensed snacks appointee of The Concentrate Manufacturing Company of Ireland in the Philippines.

It manufactures a range of carbonated and non-carbonated beverages and snacks, including Pepsi-Cola, 7Up, Mountain Dew, Mirinda, Mug, Gatorade, Tropicana/Twister, Lipton, Sting, Propel, Milkis, Premier, Let’s Be, Lay’s and Cheetos. – Rappler.com