SMC recurring income flat in 2018

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DIVERSIFIED conglomerate San Miguel Corp. (SMC) recorded flat earnings growth in 2018, mainly due to lower crude prices for its fuel business that was further dragged down by forex losses.

In a presentation to investors posted on its website, SMC said consolidated recurring net income hit P55.18 billion, one percent higher year on year. This came amid a 24% increase in consolidated revenues to P1.02 trillion.

“Income growth for the conglomerate was tempered by the sharp decline in crude prices resulting in inventory losses for its fuels and petrochemical business during the 4th quarter of 2018. This was compounded by forex translation losses for the year,” the company said in a statement.

Petron Corp. saw its net income drop 50% to P7.07 billion last year, primarily due to inventory losses incurred in November and December. The company noted that global oil production supply surged during the fourth quarter, causing a nine-week plunge in international oil prices.

At the same time, revenues of the country’s largest refiner jumped 28% to P557.39 billion.

San Miguel Food and Beverage, Inc. (SMFB) delivered an eight percent profit increase to P30.53 billion, following a 14% increase in consolidated revenues to P286.38 billion.

The food and beverage giant benefited from strong sales from all units, but its bottomline was also tempered by elevated costs during the period. For instance, net income of San Miguel Pure Foods, Inc. went down by 15% to P5.89 billion, despite a 13% increase in sales to P132.23 billion.

The power unit through SMC Global Power Holdings Corp. registered a 37% increase in operating income to P33.17 billion. Consolidated revenues rose 45% to P120.10 billion after volume grew by 39% for the period.

“This was attributed to additional generation from the Limay, Malita and Masinloc power plants and better contributions from the Ilijan and San Roque power plants,” the company said.

Meanwhile, operating income of SMC’s infrastructure unit gained 13% to P11.83 billion, after revenues of P24.53 billion, nine percent higher year on year. The company benefited from more vehicles using its operating toll roads.

SMC said the construction of Skyway Stage 3 and Metro Rail Transit Line 7 remains on track, while its Bulacan Bulk Water project will be able to start providing potable water to six municipalities within the year.

Shares in SMC went down 0.23% or 40 centavos to close at P172 each at the stock exchange on Thursday. — Arra B. Francia