Heavy Rains Fail to Dampen Pepsi’s Results, Registers High Single-Digit Growth in Q3
Manila – Pepsi-Cola Products Philippines, Inc. (PCPPI) generated strong third quarter and nine-month period top-line sales despite the impact of heavy monsoon rains that hit the country in recent months. Gross sales, fuelled by remarkable sales volume performance across brands and categories, reached P5.24 billion for the three-month period and P16.56 billion for the nine-month period ending September 30 -- posting a high single-digit growth for the third quarter and a 13% increase year to date.
“The third quarter of the year is typically a difficult period for the beverage industry due to seasonality. This year it was further compounded by the heavy rains of July and August. But our notable achievements across brands and categories were driven by a better-than-expected performance in carbonated softdrinks, particularly in the cola segment,” PCPPI President Partho Chakrabarti said.
Due to the resulting higher sales volume, cost of sales increased by 6% for the three-month and 5% for the nine-month period compared to the same period last year. Cost of sales consists primarily of raw and packaging materials, direct labor and manufacturing overhead. However, as a percentage of net sales, it has decreased 6 percentage points for the nine-month period versus 2011 levels mainly due to the decrease in average sugar price by 27% to date.
PCPPI’s strong first half-year growth allowed the company to make strategic investments in the third quarter of the year, resulting in the slight increase of operating expenses as a percentage of net sales by 2 percentage points for the three-month period and 1 percentage point for the nine-month period compared to year ago levels. Operating expenses, which mainly consists of selling and distribution, general and administrative, and marketing expenses, have remained at a manageable level. Chakrabarti further shares, “Our current increase in spending behind our key brands, such as Tropicana Coco Quench, Gatorade Low Carb, and Sting Power Pacq, is an investment towards more growth in the future.”
To date, the company’s gross profit reached P3.83 billion for the year, representing an increase of 42% compared to the same period in 2011. It likewise posted a net income of P696 million so far for the nine-month period, a growth of 208.3% compared to the same period last year.
“With our top-line growth continuing to outperform industry growth for yet another quarter, we are poised to significantly exceed our full year targets”, Chakrabarti added.