Food manufacturer Universal Robina Corp. (URC) said Friday it is exiting the China market where it operates cereals and snacks businesses.
URC said in a disclosure to the stock exchange it stopped manufacturing and selling cereals and snacks in China in the first half of 2024, with the full closure expected by 2025.
The company did not provide a reason for the decision, but said its move to wind down its operations in the country would allow it to “redeploy resources to higher-growth markets across the region”.
The company operated two manufacturing plants in China in Jiangsu and Guangdong.
Aside from China, URC also operates in other Asian countries including Vietnam, Thailand, Myanmar, Indonesia, Malaysia, Singapore and Hong Kong.
URC said it booked P580-million loss from discontinued China operations in the first half.
The company said total net income attributable to equity holders of the parent decreased by 1 percent in the first half to P6.6 billion.
Net income from continuing operations grew 8 percent year-on-year to P7.6 billion on higher operating income, while core net income grew 5 percent to P 6.7 billion, with higher tax provisions offsetting operating income growth.
First-half sales climbed 3 percent to P80.7 billion, with all business units posting higher volumes.
Operating income growth outpaced topline, increasing by 10 percent versus the same period last year to end the first half at P9.4 billion.
“Against a challenged macroeconomic landscape, URC delivered volume-led growth and strong profits. The strength of our wide portfolio allows us to continue delighting our consumers with good food and beverages choices, while also enabling us to reward shareholders with steadily increasing dividends,” URC president and chief executive officer Irwin Lee said.
“We look forward to the continued recovery of consumer sentiment in the balance of the year,” Lee said
Sales from branded consumer foods, excluding packaging and China, ended at P54.7 billion in the first half, up by 2 percent year-on-year.
Domestic sales inched up by 1 percent P37.6 billion. It said that while volume grew despite a high base in 2023, sales were tempered by weaker consumer sentiment.
International business sustained its strong growth momentum, with sales rising 8 percent on a constant currency basis to reach P17.1 billion.
URC said key markets continued to deliver growth despite the overall macroeconomic weakness across Southeast Asia.
The group’s agro-industrial and commodities group also posted sales of P25.5 billion, higher by 7 percent from a year ago level.
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