URC’s 2016 Results and 2017 Outlook
January 29, 2017
Our Company Report this week is URC. It released its 2016 financial results. Sales grew only by single-digits. The last times these occurred were in 2007 and 2012. EBITDA likewise deteriorated slightly on higher opex. URC’s bottom-line though was fortified by non-recurring gains.
URC was plagued by the Vietnam lead content issue and higher debt levels in 2016. This year will be a “slowdown” as 2016 sales were boosted by the election campaigning period in 1H16.
Still, URC has a stable balance sheet with a big room for debt if it does need it. Debt previously rose on overseas acquisitions of businesses like New Zealand-based biscuit-maker Griffin’s.
URC generously pays half of net income as cash dividends, and the projected increase in net income until 2018 is seen to enrich yields.
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