SAN MIGUEL Food and Beverage, Inc. (SMFB) looks to hike its public float up to 30% in the next few years, following the conclusion of its P34.08-billion share sale last week.
SMFB President and Chief Executive Officer Ramon S. Ang answered in the affirmative when asked if he sees another follow-on offering (FOO) in the future, depending on market conditions.
“When market improves later on in the next few years, I think. We intend to offer more shares to the public, maybe eventually up to 30% public float. So plus 18%,” Mr. Ang told reporters after the listing ceremony of shares from its FOO at the Philippine Stock Exchange (PSE) on Monday.
The food and beverage giant said in a disclosure to the stock exchange last Friday that it sold a total of 400.94 million shares at P85 each, bringing its public float to around 12%, from 4.12% prior to the offering.
The share sale represents less than half of initial size of the offering at up to 1.02 billion common shares, consisting of 887 million shares plus an over-allotment option of up to 133.05 million shares. The final price was also below the maximum offer price of P140 the company’s issue managers has set.
“The valuation was given by bankers we hired, on account of the company’s market leadership, the profitability, and the sector, beer, food. If you look at the multiples, the pricing per share should be P140. But the reason why the price was lower because there’s this crisis,” Mr. Ang said in a mix of Filipino and English.
“But even at this economic situation we were able to go out, no one else has done so. Because of the company’s good reputation, even at this situation, we can still proceed,” he added.
SMFB will be using the funds to finance the construction of 10 breweries for its beer business, which would effectively double its capacity in the next three years.
Mr. Ang said the breweries will be located in Ilocos, Pangasinan, Sta. Rosa in Laguna, Negros, Cagayan de Oro, Bacolod, Cebu, and Sariaya in Quezon. Each will have a capacity to produce 2 million hectoliters each, for a total of 20 million hectoliters. This will be added to the company’s current capacity of around 22 million hectoliters.
The company earlier said each facility will cost $100 million, for a total of $1 billion for the entire expansion.
Asked on the company’s outlook, Mr. Ang said the beer and food businesses are poised to deliver double-digit growth this year, while Ginebra San Miguel, Inc. is on track to double its profit.
SMFB’s net income rose by a fifth to P15.4 billion in the first six months of 2018, following a 15% increase in consolidated revenues to P137.4 billion. It expects to generate P33 billion in earnings this year.
Shares in SMFB added 0.06% or five centavos to close at P85 each on Monday. — Arra B. Francia
