GSMI, Tanduay post mild earnings in Jan-March

Ginebra San Miguel Inc. (GSMI), the hard liquor subsidiary of food and beverage giant San Miguel Corp., reported a 10.26-percent drop in its first quarter profit this year to P419.66 million.

On the other hand, Tanduay Holdings Inc., the liquor firm of tobacco and beer magnate Lucio Tan, reported a 5.5-percent increase in net income for the first three months of the year to P101 million, buoyed by strong sales volumes.

In its financial report submitted to the Securities and Exchange Commission, GSMI said the decline in income was due to the weakened gin and rum markets as consumers shifted preference to brandy.

Consolidated revenues also went down to P2.95 billion as against P3.15 billion a year earlier due to soft local volumes.

Total liquor volumes fell five percent, partly due to a high base in 2003 as GSMI experienced good consumer take-off towards the end of 2002, prompting dealers to replenish their inventories during the first quarter last year.

GSMI also attributed the slow sales to the residual effect of the gin product-tampering scare as well as inroads gained by several brandy products.

Volumes for Northern Philippines fell 13 percent due to a decline in consumption of GSM Round while South Philippines’ volumes remained stable as the Vino Kulafu brand sustained its growth.

Gross profit amounted to P1.11 billion, down by nine percent from last year’s P1.22 billion due to lower volumes and higher costs of packaging materials despite lower alcohol costs.