Prince Alexis P.

Garcia October 16, 2019

Universal Robina Corporation

Universal Robina Corporation (PSE:URC) is one of the largest branded consumer food and
beverage product companies in the Philippines. It is among the pioneers in the industry. John
Gokongwei, Jr., the man behind its establishment, originally started a cornstarch manufacturing
plant business, under the name Universal Corn Products Incorporated, on the 28th day of
September 1954. It was principally located in Pasig but as of today headquartered in Quezon City.
In order for the company to expand its operations and boost their product output, URC's stock
was initially offered to the public on March 25, 1994 through the stock exchange market known as
the Philippine Stock Exchange (PSE). Its stock as of October 12, 2019 is trading at P158.50. Cash
dividends distribution is currently at P1.65. With an outstanding shares of 2,204,161,868 as of the
month of October, 2019. Just like any other business, URC also experiences economic upswings
and downswings. URC’s net income for the past 5 years were: 2014-P11,559M; 2015-P12,383M;
2016-P9,608M; 2017-P10,888M; 2018-P9,204M (WSJ, 2019).
URC has unswervingly showcased its innovation and excellence through its groundbreaking
products, wide distribution network, and effective marketing, which is also evident in URC’s
formidable market leadership in snack-foods and beverages. Its core branded consumer foods
group includes manufacturing and distribution of snack-foods, beverages, and grocery products.
With its continuing operations for over 50 years and growing presence in ASEAN markets, the
company had recently expanded in New Zealand and Australia through the acquisition of Griffin’s
Foods, the number one snack-foods company in New Zealand, and Consolidated Snacks Pty Ltd
(Snackbrands), Australia’s second largest salty snacks company.
If by chance I could insource fund, I, as potential investor, won't hesitate to make an
investment. Who would not want to? URC is the leading branded snack-foods and beverage
company in the Philippines. URC—the first “Philippine Pan ASEAN Multinational Company”—has
proven itself to be a trailblazer in manufacturing with a strong and loyal consumer base. This is also
evident in URC’s formidable market leadership in snack-foods and beverages.
URC’s key to success is to build very strong branding through a robust product innovation
pipeline, consumer-centric marketing, and world-class manufacturing and supply chain
management. This criteria is a must-have which is exceptionally felt by many of the consumers
across boarders. For example, their commercials on TV like URC's —Jack ‘n Jill for snack-foods,
C2 for ready-to-drink tea, and Great Taste for coffee—that have become popular across the ASEAN
region.
Philippine media are evidencing the continual growth of URC through its disclosed data
coming from the management. Universal Robina Corporation (URC) saw its net income grow by
3% to P3.1 billion in the 1st quarter of 2019 compared to 3 billion, a decline of 12% from 2016,
P3.4 billion; despite lower foreign exchange and higher finance cost. Moreover, in a disclosure to
the Philippine Stock Exchange on the same date, the food and beverage arm of JG Summit
Holdings said it ended the 1st quarter with P33.3 billion in net sales, 7% higher from a year ago
due to healthier domestic demand. Operation income in international operations still went up by
5% year-on-year (Rappler, May 2019). Universal Robina Corporation (URC) reported a 9-percent
year-on-year increase in its net income in the first half of 2019, citing higher operating revenues.In
a regulatory filing Thursday, the Gokongwei-led food manufacturing giant said its net income in
the six-month period increased to ₱5.4 billion from the ₱4.9 billion in the same period of 2018.
URC said the increase was fueled by the "growth in operating income with offsets coming from
forex loss and higher finance cost.Net sales also increased by 4 percent to ₱67 billion, "driven by
the strong growth in the Philippines."Sales of domestic and international branded consumer foods
grew by 4 percent to ₱51.5 billion, on higher domestic revenues and operating income "led by
double digit growth in coffee, snacks and joint venture businesses." (CNN Philippines, August
2019).
In my opinion, investing in URC, with much information known, won't cause any venture.
Why URC? In addition to the facts discussed above, URC is still halfway, not yet through. Its
recent expansion in New Zealand and Australia, is a move geared towards global competency.
In the long run, URC will soon take its place as one of the globally known company in terms of
consumer products: snacks and beverages. Moreover, it would be likely better if I invest my
money rather than to save it in the bank.

References:

Mogato, A. G. (2019, May). Universal Robina Posts 3% Net Income in Q1 2019. Retrieved from
http://www.rappler.com/business/229517-universal-robina-corporation-earnings-report-q1-2019

CNN Philippines Staff. (2019, August). Gokongwei-led URC posts 9% increase in H1 net
income. Retrieved from http://www.cnnphilippines.com/business/2019/8/1/universal-robina-
2019-second-quarter-income-report.html

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