Ginebra San Miguel net income up 8% in 9 mos

Ginebra San Miguel Inc. (GSMI), the hard liquor unit of food and beverage giant San Miguel Corp., reported an eight-percent growth in its net income for the first nine months of the year to P1.2 billion, the company said in a statement.

Consolidated sales volume for the period rose six percent while revenues increased by five percent over last year. For the third quarter alone, GSMI posted profits of P323 million.

GSMI’s international business operations generated substantial volumes and revenues. During the third quarter, around 100,000 cases were exported to Thailand, increasing export volumes and revenues for the year by 133 percent and 53 percent, respectively.

Volume growth in South Philippines improved significantly due to the strong performance of the Vino Kulafu brand and the reduction of fixed costs. Vino Kulafu’s year-to-date volumes grew by 43 percent over last year due to more effective advertising and promotions and improved product distribution.

In North Philippines, year-to-date volumes were five percent above last year due to the strong growth of the Frasco and Frasquito lines.

GSMI expects volume to improve further in the fourth quarter with the onset of the holiday season and as GSMI’s international business operations continue to generate significant volumes from new contracts.

As economic difficulties persist, GSMI will continue its efforts to reduce overhead costs by streamlining work systems and managing operational expenses.

GSMI will build a P2-billion facility in Batangas in line with its aggressive overseas expansion. The plant, which will be completed in two years, is expected to increase capacity by 20 million cases of liquor per year.

The company aims to bring its products to other Asian markets and other countries with high growth potentials.

Following its initial success in exporting liquor products to Thailand, GSMI has been able to penetrate the Korean market through a tolling arrangement for a new fruit-based liquor, Celavi. This product capitalizes on developing private labels for foreign partners as a means of gaining access to new markets, with minimal operating and financial risks.

For the rest of the year, the company plans to launch a range of products and packaging innovations to capture emerging consumer segments and to fortify its hold on traditional markets.