San Miguel says recurring profit jumps 29% in 1st half

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DIVERSIFIED conglomerate San Miguel Corp. (SMC) grew its recurring profit by 29% in the first six months of 2018, following higher volumes and favorable selling prices across its units.

In a statement issued Thursday, SMC reported a recurring net income of P35.5 billion as of end-June, supported by a 27% jump in consolidated revenues to P499 billion.

The listed company said that including the impacts of mark-to-market losses due to foreign exchange translation, net income would have stood at P27.6 billion, 6% higher year-on-year.

“Increased business focus and a lot of hard work were key to our group’s stellar performance. We’re encouraged by the results we’ve had so far, and are very hopeful that this momentum will carry through for the rest of the year,” SMC President and Chief Operating Officer Ramon S. Ang was quoted as saying in a statement.

SMC’s core interests are in food and beverage, power, fuel and oil, and infrastructure.

The newly consolidated food and beverage arm under San Miguel Food and Beverage, Inc. (SMFB) delivered a 20% increase in net income to P15.4 billion. This followed a 15% uptick in combined sales revenues to P137.4 billion.

The food business alone generated a profit of P3.1 billion, as consolidated revenues went up 12.4% to P62.9 billion due to the strength of its agro-industrial and branded value-added businesses.

The beer unit through San Miguel Brewery, Inc. expanded its revenues by 18% to P62.5 billion. Its net income accordingly grew by 26% to P11.3 billion for the first semester.

Ginebra San Miguel, Inc. posted a net income of P506 million, after revenues went up 19% to P12 billion due to the growth of its Ginebra San Miguel and Vino Kulafu brands.

Petron Corp. exhibited profit growth of 16% to P9.5 billion from January to June, fueled by the sales volumes from both Philippine and Malaysian operations. The company also benefited from the rising prices of crude oil and finished products.

Petron’s consolidated revenues reached P273.5 billion, 32% higher than the P207 billion it logged in the same period a year ago.

Meanwhile, SMC Global Power Holdings Corp. saw its consolidated revenues climb by 41% to 57.4 billion, as it recognized additional contributions from Masinloc, Limay, and Malita, alongside higher average realization prices for Sual’s bilateral and spot sales, and higher spot sales from Ilijan.

The power unit’s operating income stood at P17 billion for the first half, 28% higher than the P13.3 billion it posted in the same period a year ago.

For the packaging business, the San Miguel Yamamura Packaging Group expanded its operating income by 17% to P1.6 billion in the first semester. Sales revenues went up by a fourth to P17.6 billion following strong sales from the glass, plastics, and metal products. The company also noted the positive performance of its Australian operations.

The infrastructure business also recorded an 11% increase in consolidated revenues to P12.1 billion, as the company saw higher traffic volume from its operating toll roads. These include the South Luzon Expressway, Skyway Stage 1 and 2, and the Ninoy Aquino International Airport Expressway. Its operating income likewise gained 19% to P6.2 billion.

Shares in SMC fell by 70 centavos or 0.5% to close at P138.30 each at the stock exchange on Thursday. — Arra B. Francia