URC adopts crisis-response measures amid oil pressures

By Alexandria Grace C. Magno, Reporter

UNIVERSAL ROBINA CORP. (URC) said it has implemented company-wide “emergency crisis mode” measures following the escalation of the conflict in the Middle East and its impact on operating costs.

“Since the beginning of the conflict, all the business units of URC have immediately gone into ‘emergency crisis mode’ and captured all of the impacts of the effects of that conflict into the business operations,” URC President and Chief Executive Officer Irwin C. Lee said at the company’s annual stockholders’ meeting on Friday last week.

The Gokongwei-led food and beverage manufacturer said it has assessed the potential effects of sustained higher oil prices on its operations, using an assumed oil price environment of about $100 per barrel for planning purposes.

“So two months into the conflict, we have a fairly good idea and capture of all of the cost impacts of all of that’s happening, starting with implications on transport costs, fuel costs, and then the carry-on effects of oil and oil derivative materials to things like resins and packaging materials. All of this, we have assumed how that might continue for the balance of the year under a $100 oil environment,” Mr. Lee said.

The company said it has identified corresponding cost pressures across transport, fuel, packaging, and other oil-related inputs.

“We have a good quantification of the impact of those and we have put forth mitigation plans in terms of savings efforts as well as price increases that are now being executed in the market,” Mr. Lee added.

URC also said it continues to prioritize supply continuity and secure material sources to avoid disruptions in operations.

The company added that it is monitoring possible second-order effects from higher input costs, including fertilizer prices, which could affect market conditions in the coming quarters.

“We are looking at the implications of higher fertilizer costs that will still come out and hit the market towards the balance of the year and into next year,” Mr. Lee said. “This is preparing ourselves for the future, understanding what are structural effects, what are temporary effects, and extending our mitigation plans into 2027.”

The listed manufacturer reported a 2% decline in first-quarter core net income attributable to the parent to P3.8 billion, as lower sugar selling prices weighed on commodities profits despite higher sales from its branded consumer foods business.

Quarterly sales rose 6% to P47.9 billion, driven by broad-based volume growth in Branded Consumer Foods (BCF) Philippines, as well as contributions from its Animal Nutrition and Health and Flour divisions.

BCF sales increased 9% to P32.2 billion during the quarter. BCF Philippines grew 10% to P22 billion due to volume expansion and the carryover effects of pricing actions implemented last year.

International BCF sales rose 6% to P10.2 billion, led by continued demand for Munchy’s products in Malaysia.

On the international side, URC said its overseas business posted stronger earnings momentum during the first quarter, with profits rising about 11% on a constant currency basis and 17% in peso terms.

“We are seeing a quarter-on-quarter improvement in countries like Vietnam. We mentioned that we did see disruption in the trade in Vietnam in the second and third quarters of 2025. That has begun to turn in the last quarter of 2025 and we have seen continued improvement in 2026,” Mr. Lee said.

Despite improving trends in some overseas markets, the company said geopolitical developments in the Middle East continue to pose risks to consumer demand and operating conditions.

“We remain vigilant while our volumes remain strong into the start of the second quarter,” Mr. Lee said.

“We are watching very closely what the impact is on consumption as more price increases by other manufacturers and the continued spike in fuel costs affect consumers. It remains to be seen whether consumption patterns may have an effect in the second half of the year and that’s what we will have to be vigilant about and adjust our plans accordingly,” he added.