Pepsi-Cola PH reports decline in 2014 net income

MANILA, Philippines – Pepsi-Cola Products Philippines Incorporated (PCPPI) said its net income for 2014 fell by 10.2% in 2014 to P810.9 million ($18.15 million) versus P903.4 million ($20.22 million) in 2013.

In a filing with the Philippine Stock Exchange, the company said Monday, April 13, that its net income primarily fell due to competitive pricing actions in the first semester, as well as the impact of Super Typhoon Yolanda.

PCPPI said net sales went up by 12.7% in 2014 to P25.32 billion ($566.87 million) compared to P22.46 billion ($502.87 million) posted a year ago. Operating expenses also increased by 11% to P5.22 billion ($116.86 million).

Carbonated soft drinks drive net sales

Net sales from the carbonated soft drinks (CSD) business reached P18.56 billion ($415.26 million), up 13.8% from a year level of P16.3 billion ($364.68 million).

Net sales from non-carbonated beverages (NCB) reached P6.7 billion ($149.91 million), inched up by 9.9% to P6.76 billion ($151.25 million) versus P6.15 billion ($137.64 million) in 2013.

“This is a commendable feat, as it overlapped two consecutive years of strong double-digit growth amid a modestly-growing CSD industry and a continuously intensifying competitive landscape,” PCPPI said.

For fourth quarter 2014 alone, gross sales went up by 13% to P7.9 billion ($176.46 million), making it the second quarter in a row where revenue growth was ahead of volume growth, amplified by the company’s revenue management initiatives.

“These gains were made possible by the company’s relentless focus on expanding distribution, supported by significant investments in manufacturing, marketing, and distribution assets amounting to P3.9 billion ($87.20 million) this year,” PCPPI said.

To maintain its position as one of the leading companies in the ready-to-drink, non-alcoholic beverage market, PCPCI said it will continue with its long-term strategy of distribution and manufacturing investments supported by marketing programs to continue the growth momentum.

Snack foods venture

PCPPI is a licensed bottler of PepsiCo, Incorporated and Pepsi Lipton International Limited in the Philippines.

Lotte Chilsung, one of the biggest beverage companies in South Korea, is the leading shareholder of PCPPI. It co-manages PCPPI with PepsiCo.

The company is also planning to venture into snack food business with the establishment of P650 million ($14.53 million) manufacturing facility to be operational by the second half of 2015.

PCPPI said the venture will enable it to expand its product offerings as well as complement its existing beverage business.

The company manufactures a range of carbonated soft drinks and non-carbonated beverages that include well-known brands Pepsi-Cola, 7Up, Mountain Dew, Mirinda, Mug, Gatorade, Tropicana Twister, Lipton, Sting, Propel, Milkis, and Let’s Be.  – Rappler.com