SMC on track to meet income target for 2002

Buoyed by the sustained performance across most of its businesses, food and beverage giant San Miguel Corp. (SMC) said yesterday it expects to meet its full-year income target of P7 billion, or an increase of 11 percent from the previous year.

In a statement, SMC said the growth in its income will come from the continuing favorable performance of domestic beer sales, the full year impact of its reacquisition of Coca-Cola Bottlers Philippines Inc. (CCBPI), significant contributions from the glass and metal segments of packaging and the feeds and processed meats of the food group.

SMC reported a net income of P6.5 billion last year as against P6.8 billion in 2000. Consolidated net income without the acquisitions of CCBPI and Purefoods Corp. would have reached P7.3 billion, up seven percent from a year earlier.

The food-and-drinks conglomerate said the increase in its income "reflects that SMC has overcome the dilutive effect of its acquisitions and the benefits from the additional funds generated from the buy-in of Kirin Brewery into SMC."

Kirin, Japan’s largest brewery firm, acquired a 15- percent stake in SMC for P27.88 billion (roughly $536 million) to establish a presence in the Philippines.

Currently among the 10 largest brewers worldwide with a market capitalization of $7 billion, Kirin’s diverse business portfolio includes spirits and wines, softdrinks, food products, pharmaceuticals, biotechnology products, real estate and restaurants.

With the Kirin investment, SMC has further positioned itself as a strong player in the Asia-Pacific region. The company has been focusing on the region for its growth strategies, banking on its advanced technology, high quality products, strong brands and competence in logistics.

SMC expects its operating income to increase by 25 percent to P13 billlion while consolidated revenues are seen to grow over 16 percent or over P140 million. EBITDA (earnings before taxes, depreciation and amortization), on the other hand, is expected to reach P20 billion, up 12 percent from 2001.

For the third quarter this year, profits of SMC amounted to P1.56 billion or 53 percent higher than the previous level, bringing year-to-date net income to P4.56 billion.

Operating profits amounted to P9.1 billion for the period January to September this year, 27 percent higher than last year. For the third quarter alone, operating profits amounted to P2.99 billion, or up by 53 percent.– Zinnia dela Peña