A year of growth in revenue wasn't enough to shield Victorias Milling Co., Inc. from a downturn in profitability. The company recently announced a 12.64% decrease in net income, settling at P1.35 billion for the fiscal year concluding in August.
Despite a substantial 11.48% rise in total revenue, reaching P12.68 billion, escalating costs proved to be a significant drag on earnings. This revenue increase marked a jump from the previous year’s P11.38 billion, yet couldn’t overcome the financial pressures building within the company.
The core of the revenue growth stemmed from a robust 19.89% surge in sales, climbing to P10.54 billion. However, this positive trend was partially offset by a 17.12% decline in revenue generated from services, falling to P2.14 billion.
Beyond direct sales, the company saw a 16.98% increase in other income sources, reaching P356.83 million. This included gains from storage, handling fees, interest earned, and investment returns – a bright spot in the overall financial picture.
The primary challenge lay in the escalating costs of doing business. The cost of sales and services jumped 13.04% to P10.78 billion, largely fueled by soaring raw material prices and a general increase in manufacturing expenses.
Adding to the financial strain, operating expenses experienced a substantial 31.92% increase, reaching P876.27 million. This surge was driven by higher taxes and licensing fees, particularly those associated with stock dividend distributions, alongside increased professional fees and research costs.
The company also faced rising expenses related to representation, research and development initiatives, and obligations tied to employee retirement benefits, collectively contributing to the overall increase in operating costs.
As of December 15th, shares of Victorias Milling Co., Inc. were trading at P2.01 apiece, reflecting the market’s response to these recent financial results.
