Food and beverage concern RFM Corp. is looking to increase dividend payments to shareholders this year given the robust performance of its brands.
RFM chief executive officer Joey Concepcion said the company’s board of directors approved Wednesday the payment of cash dividends amounting to P349 million or P0.116936 per share to shareholders as of record of January 26. The dividends are payable on February 22.
“RFM is looking into more dividend payments, perhaps quarterly instead of twice a year and also targeting about 5% dividend yield. RFM paid out 60% of its net income in the previous year but we will revisit in late 2022 if we can further improve our payout, given the cash accumulation and performance of the brands,” Concepcion said in a statement.
Based on preliminary figures for 2021, RFM likely posted flat earnings due to inflation but sales grew seven percent to P16.8 billion on sustained growth of its Selecta Milk as well as Fiesta and Royal pasta and sauces.
The ice cream business in partnership with Unilever likewise turned in better sales last year despite cost pressures from raw materials.
White King mixes and our institutional flour and bunline businesses also delivered higher contributions.
“However, the inflation from elevated wheat, milk and other key raw material prices are dampening the expansion in our net income. The good thing with our brands especially in the ice cream unit, is that even if we experience cost pressures from raw materials and opex (operating expenses) this year, we have been able to pass on in the past the impact on margins,” Concepcion said.
He pointed out that RFM’s parent company remains debt-free and has used its excess cash to implement share buy backs and increased dividend pay outs, on top of fully funding needed capex.
“The recent surge in covid19 infections is also a concern to most businesses today. We hope the infections are indeed mild although RFM is prepared for the worst. We just need everyone to be protected by vaccines and boosters,” Concepcion said.