San Miguel core profit jumps 48% to P54.2 billion

MANILA, Philippines — Diversified conglomerate San Miguel Corp. (SMC) saw its core profit expand by nearly half in the first six months as the group’s businesses stayed resilient despite volatile global markets, higher costs and cautious consumer spending.

SMC reported a 48-percent jump in core net income to P54.2 billion in the first half, with revenues jumping by 34 percent to P964.1 billion.

The expansion was driven by higher volumes and prices in its fuel and oil business, stronger contributions from power, as well as continued growth in food.

Reported consolidated net income, however, fell by 44 percent year-on-year to P37.7 billion, reflecting foreign exchange effects and other non-core items.

SMC said last year’s result also benefited from a P21.9-billion gain from the Chromite transaction which involved the de-consolidation of certain power assets.

SMC chairman and CEO Ramon Ang said the group’s businesses performed well in the first half despite a more challenging operating environment.

“While cost and market pressures may continue, our underlying operations remain sound. We will stay disciplined on costs, continue improving efficiency and invest in areas that support our long term growth and the country’s broader economic development,” Ang said.

During the first semester, the earnings of San Miguel Food and Beverage Inc. slipped by four percent to P22.1 billion, even as revenues improved by two percent to P205.3 billion.

SMC said growth in its food business helped offset softer consumer spending and disruptions in some export markets.

Petron Corp. likewise posted a 27-percent decline in net income to P3.8 billion during the period as geopolitical tensions in the Middle East pushed up crude prices, import premiums, freight costs and other operating expenses.

Revenues, however, surged by 57 percent to P605.9 billion, fueled by higher prices and sales volumes.

SMC Infrastructure, for its part, recorded revenues of P20.5 billion, up by three percent year-on-year, even as average daily traffic declined by one percent to 1.07 million vehicles as elevated fuel prices weighed on road travel demand.

San Miguel Global Power’s revenues jumped by 27 percent to P101.9 billion, while operating income soared by 90 percent to P42 billion.

The group’s cement business, which includes Eagle Cement, Northern Cement and Southern Concrete Industries, booked a two-percent improvement in first half revenues to P18.2 billion as higher sales volumes and market share gains offset lower average selling prices amid intense competition and continued pressure from cement imports.