SMC posts 24% hike in revenues

San Miguel Corp. (SMC), Southeast Asia’s largest food and beverage conglomerate, registered a 24 percent growth in consolidated revenues to P100.6 billion for the first six months, driven by the continued strong performance of its local and international beer operations, packaging and food group.

However, the company reported a 3.7-percent decline in its first half income to P3.85 billion. Its second quarter net profit dipped eight percent to P2.07 billion as it felt the impact of higher transport and raw material costs and interest payments.

"The company experienced continued increases in costs of raw materials, packaging and utilities as well as higher financing charges as San Miguel took on additional funding for acquisitions and expansion," SMC said in a statement.

SMC secured a $1.2-billion bridge financing to fund its purchase of Australian dairy company National Foods Ltd. – its biggest purchase to date. The deal is part of SMC’s strategy to seek growth in offshore markets after dominating its home market for beer, softdrinks, liquor, poultry, dairy and processed food.

The conglomerate’s Philippine beer business reported revenues of P20.44 billion, up 11 percent from the previous level as it capitalized on an expanded beer drinker base and an improved distribution system. Operating income went up eight percent to P4.33 billion due to stable malt prices and higher average selling prices. Despite higher excise taxes, volume level has been sustained on the back of new programs to boost sales.

For its overseas operations, beer sales volume surged five-fold as distribution and operations achieved further efficiency. Overall sales volume climbed 12 percent following the strong performance of its Indonesian and Australian beer operations.

SMBD International also achieved gains in its China operations (including Hong Kong) where volume grew 10 percent versus last year due to the strong performance of Dragon, Blue Star and other economy brands.

Driven by the continued strong performance of all its business units, the San Miguel Food Group realized P29.1 billion in revenues for the first half this year or five percent higher than last year. And with selling prices improving considerably in the second quarter, first half operating income rose nine percent to P1.05 billion as profit margins recovered.

SMC hard liquor unit Ginebra San Miguel registered sales revenues of P6.2 billion, three percent higher than the previous level. Operating income amounted to P781 million due to a softening liquor market as well as rising cost pressures, particularly on major raw materials and higher excise taxes.

The Coca-Cola Beverage Group, on the other hand, registered a significant improvement in salesrevenues from the first quarter due to a marked upturn in sales in May and June, particularly for water and juices. Sales revenue reached P20 billion while consolidated operating income amounted to P695 million.

Meanwhile, Berri Ltd., SMC’s Australian juice manufacturing unit, registered sales of A$247.3 million, two percent higher than last year.