SMC reports 7% income growth to P7.37B

Food and beverage giant San Miguel Corp. (SMC) reported a seven-percent growth in its 2003 net profit to P7.37 billion, driven by robust volumes of beer sales and the improved performance of its packaging and food businesses.

The figure exceeded SMC’s own full-year target of P7 billion, or 5.28 percent higher than the restated income.

In a statement issued yesterday, SMC said the rise in its income was due to brisk domestic beer sales and strong fourth quarter gains in international beer operations, particularly Australia’s J. Boag & Son and in South China.

Consolidated operating income also increased by 13 percent to P14.4 billion on the back of a nine-percent gain in consolidated sales revenues to P148.6 billion from only P136.1 billion a year ago. Beverages registered a 14-percent growth, packaging (10 percent), and the food group (four percent).

Sustaining the sales momentum over the past seven quarters, SMC local beer operations registered a 13-percent increase in 2003 revenues to P30.6 billion following a 12-percent gain in volume that reached its highest level since 1997. Operating income reached P5.5 billion or an increase of 20 percent from the previous level.

SMC sells nine of every 10 bottles of beer in the Philippines with domestic sales accounting for a fifth of the company’s total revenues.

Beer sales abroad, which account for about a tenth of revenues, recovered from the adverse effects of the deadly SARS (Severe Acute Respiratory Syndrome) epidemic, posting an operating income of $10.27 million in the second half. Consolidated operating income in 2003 amounted to $1.46 million.

Volume in the second half of last year grew 12 percent while total year volume reported a four-percent improvement.

Buoyed by favorable results in Indonesia, Vietnam, and J. Boag in Australia, total sales revenue went up by one percent to $235 million.

Ginebra San Miguel Inc., SMC’s hard liquor unit, registered revenues of P12 billion or six percent better than the previous year. Operating income, on the other hand, was slightly higher at P2.7 billion.

Consolidated net revenues of the Coca-Cola Beverage Group amounted to P41.3 billion, registering an improvement of 17 percent.

Year-to-date revenues of San Miguel Packaging Products rose 13 percent to P17.3 billion. All businesses, except aluminum cans, composites and paper, registered volume improvements resulting in a 10 percent overall volume increase. With tight cost management and improved efficiencies, operating income surged 30 percent to P2.5 billion.