Top Frontier profit drops in 3rd quarter

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Top Frontier

By Arra B. Francia, Reporter

TOP FRONTIER Investment Holdings, Inc. (TFIHI) posted a 17% drop in attributable profit in the July to September period, as higher expenses dampened the rising sales of its units.

In a regulatory filing, the TFIHI posted a net income attributable to equity holders of the parent of P2.06 billion, lower than the P2.92 billion it booked in the same period a year ago. This came amid a 30% increase in sales to P262.27 billion.

On a nine-month basis, TFIHI’s attributable profit further slipped by 34% to P5.57 billion, even as revenues climbed 27% to P761.16 billion.

TFIHI is the largest shareholder of diversified conglomerate San Miguel Corp. (SMC), which has core interests in food and beverage, fuel and oil, power, packaging, and infrastructure.

The beverage unit through San Miguel Food and Beverage, Inc. expanded revenues by 15% to P206.62 billion in the nine-month period, boosted by the higher volumes across the beer, liquor, and food divisions. This resulted to a 17% increase in operating income to P34.03 billion.

San Miguel Yamamura Packaging Group generated P27.14 billion in revenues for the period, 21% higher year-on-year following the growth of its Australian operations.

For Petron Corp., consolidated revenues exhibited a 34% increase to P419.86 billion, resulting to a 3% uptick in consolidated profit.

The energy unit meanwhile saw its operating income climb 31% to P25.75 billion.

At the same time, the company recorded a 31% increase in cost of sales to P605.01. Billion, on account of higher crude prices and impact of excise tax on Petron. San Miguel Brewery was also affected higher excise taxes, while the food group incurred higher costs due to price increases in major raw materials.

TFIHI also logged higher interest expenses during the nine-month period, given the higher level of loans payable and long-term debt compared to last year.

As of end-September, SMC has issued P50 billion in Series A, B, C, D, E, F, and G bonds, it availed $400 million worth of long-term debt last year, in addition to another $400 million last March. It also availed of $300-million corporate notes last June.

The power unit through SMC Global Power Holdings, Corp. also availed of $1.2-billion loan this year, in addition to P15 billion worth of bonds last August to finance its acquisition of the Masinloc group. In 2017, the company also raised P20 billion worth of bonds.

The peso further affected the company’s expenses, as it depreciated to P54.02 by the end of September from P49.93 in December 2017. This led to higher foreign exchange losses on the translation of the foreign currency denominated long-term debt and finance lease liabilities.

Shares in TFHI gained 0.36% or P1 to close at P279 each at the stock exchange on Thursday.