San Miguel grants additional 35¢/share cash dividend

Food and beverage giant San Miguel Corp. (SMC) declared an aadditional 35 centavos cash dividend per share to all shareholders as of Dec. 29, 2005.

This brings to 70 centavos the total cash dividends declared by SMC for the year. In a disclosure to the Philippine Stock Exchange, SMC said the dividends are payable on Jan. 30, 2006.

SMC reported a net income of P5.23 billion in the nine months ending September this year, six percent lower than the previous level. Revenues also grew 32 percent to P161 billion due to the robust performance of its various businesses.

An analyst at a local brokerage house said SMC posted weak third quarter profits due to higher raw material costs and debt payments after it secured loans to fund the acquisition of Australia’s National Foods Ltd. and Berri Ltd.

SMC took on more debt to fund about 80 percent of its $1.5-billion purchase of National Foods in April, bringing its net debt level to around $2 billion at the end of June. The continued strong performance of SMC’s international beer operations and food, water and juice businesses, however, cushioned the drop in the conglomerate’s earnings.

Corporate volume growth increased by 15 percent while consolidated operating income rose nine percent to P12.2 billion.

Newly-acquired Australian firms National Foods and Berri provided a hefty addition to foreign revenues which jumped by 225 percent or more than triple than that of last year.

The consolidation of National Foods beginning in June contributed P15.9 billion in revenues and P1.46 billion in operating income as of end-September.

Appreciable gains were also achieved in the domestic beer operations which generated P5.79 billion in operating income, up 11 percent from last year’s level. This increase was achieved largely on the back of an 11 percent improvement in revenues and prudent spending.

SMC said new programs have been put in place to further add momentum to these gains towards the fourth quarter when the company’s major products hit peak sales.

The conglomerate has been expanding overseas after dominating its home market for beer, soft drinks, liquor, poultry, dairy and processed foods. Analysts said higher excise taxes and rising prices of raw materials would weigh on SMC’s domestic food and beverage operations for the rest of the year.