Universal Robina Corp., the food manufacturing arm of the Gokongwei Group, said Friday it has decided to exit the Chinese market, stopping its manufacturing and sale of its cereals and snacks brands in China. Full closure is expected by 2025.URC said the move is part of its broader strategy to redeploy resources to higher-growth markets across the region.
It is unclear whether URC’s decision has anything to do with the rising tension between the Philippines and China over territorial dispute in the West Philippine Sea.
“We believe this strategic exit from China will enable us to better allocate our resources to markets with higher growth potential,” said Irwin Lee, president and chief executive officer of URC. “Our focus remains on driving growth in regions where we see greater opportunities for expansion,” he said.
URC reported first-half net income rose 5 percent to P6.7 billion on the back of a 3 percent growth in sales to P80.7 billion as sales volume picked up across all business units despite a challenging economic environment.
Operating income saw a significant rise of 10 percent year-over-year to P9.4 billion, highlighting URC’s successful margin improvement strategies, including easing commodity costs and effective cost-saving measures.
In addition to its solid financial performance, URC has declared a P1.90 per share dividend, payable to shareholders on record as of 30 August. The payout is scheduled for September 25. This marks a 5 percent increase in the yearly dividend per share over the past four years, underscoring URC’s commitment to delivering shareholder value.
“Consistent dividend growth is a testament to our strong financial health and our dedication to rewarding our investors,” Lee added. “We are pleased to be able to offer this increased dividend to our shareholders.”
Branded Consumer Foods, excluding Packaging and China, reported a 2 percent increase to P54.7 billion in sales. In the Philippines, BCF grew by 1 percent, achieving P37.6 billion in sales despite a high base in 2023 and weaker consumer sentiment. Internationally, BCF saw an 8 percent growth on a constant currency basis, reaching P17.1 billion in revenues.
The Agro-Industrial and Commodities group experienced a 7 percent increase in sales to P25.5 billion. This growth was driven by higher volumes, although it was moderated by significant price declines in sugar and flour.
“Despite the macroeconomic challenges, URC has demonstrated strong performance through volume-led growth and robust profits. We remain optimistic about the continued recovery of consumer sentiment and are committed to leveraging our diverse portfolio to drive further growth and deliver value to our shareholders,” said Lee.
