DIVERSIFIED conglomerate San Miguel Corp. (SMC) recorded a 5% profit decline for the first half of 2019, which was attributed to flat sales and the slow performance of Petron Corp.

In a presentation posted on its website, the listed firm said net income dropped to P26.15 billion, compared to P27.59 billion in the same period a year ago, following 2% growth in net sales to P509.5 billion.

Consolidated operating income was also down by 14% to P57.6 billion, as SMC noted that Petron was “weighed down by prevailing movements in world crude oil prices and weak refining margins.”

The oil refining and marketing company further had to shut down its Bataan refinery for scheduled maintenance and additional repairs after the earthquake last April. With this, Petron’s net income plunged 72% to P2.62 billion for the first semester, after net sales also fell 7% to P254.81 billion.

San Miguel Food and Beverage, Inc.’s (SMFB) performance was also dragged by higher costs. SMFB saw its net income drop by 5% to P14.67 billion, even as net sales grew 10% to P151.11 billion.

The food business alone, through San Miguel Pure Foods, said net income plummeted 85% to P447 million. Net sales were up by 5% to P66.13 billion.

Ginebra San Miguel, Inc. and San Miguel Brewery, Inc. helped offset the weakness of the food unit, as their net income climbed 94% to P980 million and 12% to P13.26 billion, respectively.

Meanwhile, SMC Global Power Holdings, Inc. delivered a 288% jump in earnings to P7.26 billion. Consolidated off-take volume grew by 28% to 14,635 gigawatt-hours, due to new bilateral contracts from the additional power generated by the Masinloc, Limay, and Malita power plants, as well as improved plant capacity from Sual and Ilijan.

For the infrastructure business, income from operations slid by 3% to P6.03 billion, amid flat sales of P12.32 billion. The company noted that vehicular traffic volume improved by 6% across its operating toll roads, including Tarlac Pangasinan La Union Expressway, Metro Manila Skyway, and the South Luzon Expressway, among others.

The packaging group generated P1.7 billion in income from operations, 3% higher year on year, after a 2% uptick in net sales to P17.84 billion.

Shares in SMC dropped 1.69% or P3 to close at P175 each at the stock exchange on Thursday. — Arra B. Francia