GINEBRA San Miguel, Inc. (GSMI) targets to generate P1.2 billion in earnings this year, around double the net income it realized in 2017 amid an expected recovery in the sales of gin.
“I think we’ll be hitting P1.2 billion for net income,” GSMI President Ramon S. Ang told reporters after the company’s annual shareholders’ meeting in Mandaluyong on Thursday.
The listed beverage manufacturer booked P602 million in net income last year, also 66% higher than the P361 million it posted in 2016.
GSMI is also looking to double its sales volumes for the year. In 2017, the company sold a total of 27.7 million cases worth of beverage products, 10% higher year on year.
Naka-recover na, nagkaroon ng problema sa volume noon (We have recovered, there was a problem in volume before)… Gin is rebounding, even globally. Maybe we’re riding on that popularity as well,” Mr. Ang said.
GSMI General Manager Emmanuel B. Macalalag said the company plans to expand their capacity to support this year’s profit growth target, but noted the timeline for the expansion is still being assessed.
“We have plans for expansion, just putting in the right time. There’s capacity for now. We’re looking at various sites,” Mr. Macalalag told reporters, adding that plant utilization is currently at 50%.
The planned expansion will be done to address logistical issues, according to Mr. Macalalag.
Mr. Ang said the company will be coming up with a plan on the retrieval of used bottles of GSMI products. Bottle retrieval is currently being done by one of its subsidiaries.
On the other hand, Mr. Ang expressed confidence the company will be able to fully sell the shares from its planned $3-billion follow-on offering (FOO) from the consolidation of conglomerate San Miguel Corp. (SMC)’s food and beverage, beer, and liquor businesses, despite volatility in the local market.
“When we go down for listing, we are confident that we can list the shares,” said Mr. Ang, who also sits as the president and chief operating officer of SMC.
“If your stocks are good, company is good, you should not worry about the market condition. Beer, Ginebra, food, it’s also the same. It’s a very good company,” he added.
The FOO is set to be conducted by San Miguel Food and Beverage, Inc. (SMFBI), the company that will emerge after the consolidation of San Miguel Pure Foods Company, GSMI, and San Miguel Brewery, Inc.
This will allow the company to comply with the 10% minimum public ownership set by the Securities and Exchange Commission, as SMFBI will have a float of only around 4%.
“We want to comply with the minimum public float which is at the moment 10%. We may go as high as 30%, depending on the market condition or our requirement if we want to raise more money then we will sell more shares,” Mr. Ang said.
Mr. Ang said the company may conduct the FOO toward the end of this year or early 2019, noting that the delay in the issuance was due to regulatory approvals.
Shares in GSMI gained 12 centavos or 0.62% to close at P19.48 each at the stock exchange on Thursday. — Arra B. Francia