The Philippine beverage firm Universal Robina Corp. (URC
), the food manufacturing unit of the Gokongwei Group, has cut its revenue growth target set for fiscal year 2016 as a product recall resulted in a decline in sales in Vietnam, according to the Standard
“Given the unexpected significant decline in Vietnam, we are revising our guidance with topline growing by low to mid-single digit and operating income slightly lower than fiscal year 2015,” URC said.
URC said sales recovery in Vietnam was expected to be slow as the company planned to rebuild the brand in the Southeast Asian country.
This is the second time this year that URC revised its business targets.
The food manufacturing company projected revenues to grow by 8%-9% the start of fiscal year 2016. It reduced the sales growth target to 6%-7% in May, with operating income projected to rise 10%.
URC’s fiscal year begins October and ends September of the following year.
The Ministry of Health asked URC to recall C2 due to excessive lead content. Photo: www.doisongphapluat.com
In May, the Vietnamese Ministry of Health issued a ruling to recall one batch of C2 Lemon 350 ml manufactured on Feb. 4, 2016 and one batch of Rong Do 240 ml manufactured on Nov. 10, 2015 in URC Hanoi, one of its four facilities in the country.
The ministry imposed a fine of 5.8 billion dong ($260,000) against the URC unit in Vietnam after tests found high lead content in its flagship beverage brands C2 and Rong Do.
URC said it consolidated sales of goods and services rose 4.2% year-on-year to $1.83 billion in the first nine months of fiscal year ending June 2016.
The company’s international sales of branded consumer foods were flat at $530 million as the problem encountered in Vietnam put a drag on results of the international branded business, it noted.
However, it net income came in at P12.03 billion ($258 million), rising 26.4% from the same period last year.