EARNINGS of diversified conglomerate San Miguel Corp. (SMC) slumped by 18% in the first three months of 2019, as its fuel and food businesses were weighed down by volatile global oil prices and higher input costs.

In a statement issued after the market’s close on Thursday, SMC said net income dropped to P12.8 billion, even as consolidated revenues went up seven percent to P250.9 billion.

“The slowdown in these businesses is temporary. We are not taking them lightly and we’re seeing clear signs of recovery. We anticipate higher consumer spending from an improving economy, primarily the easing of inflation,” SMC President and Chief Operating Officer Ramon S. Ang said in a statement.

The company also expects the election season to help boost results.

“We’ve implemented a good number of measures to recover lost ground and further strengthen our competitive positions in industries where we are in,” Mr. Ang added.

San Miguel Food and Beverage, Inc. (SMFB) posted a one percent profit increase to P7.4 billion, following a 14% uptick in consolidated revenues to P75.7 billion. The growth was attributed to higher volumes across the beer, spirits, and food businesses.

Profit growth, however, was tempered by an industry-wide oversupply and decline in poultry prices, due to the government’s lifting of special safeguard duties against imports. The company was also affected by the rising cost of major raw materials such as wheat, soybean meal, corn, and cassava.

The fuel and oil business through Petron Corp. saw a 77% decline in net income to P1.3 billion during the three-month period, as revenues also dropped four percent to P124.6 billion. Petron’s local operations reported a five percent drop in volumes following the implementation of the Tax Reform for Acceleration and Inclusion (TRAIN) law. This came alongside prevailing movements in global crude prices and lower refining margins.

SMC Global Power Holdings Corp., meanwhile, posted an operating income of P9.8 billion, 23% higher year on year on the back of a 41% uptick in consolidated revenues to P34.7 billion.

Longer operating hours at the firm’s Ilijan and Sual power plants resulted to a 42% increase in consolidated off-take volume growth to 6,826 gigawatt hours. The full contributions of Units 2 and 3 of the Malita and Limay power plants further supported SMC Global Power’s results.

Meanwhile, SMC Infrastructure’s operating income rose one percent to P3.1 billion. Revenues likewise increased eight percent to P6.4 billion.

Shares in SMC soared 3.99% or P7.50 to close at P195.50 each at the stock exchange on Thursday. — Arra B. Francia

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