SMC posts P9.15-B net income in 2005

San Miguel Corp. (SMC), Southeast Asia’s largest food and beverage company, said yesterday its net income last year rose three percent to P9.15 billion from a restated net profit of P8.86 billion in 2004, on strong overseas sales.

Excluding one-time expenses and charges, SMC said its net income for 2005 would have increased by 10 percent.

Consolidated revenues grew 30 percent to P226.9 billion, mainly due to higher exports and sales and the consolidation of its Australian businesses led by dairy giant National Foods Ltd. (NLF).

"The contribution of SMC’s overseas operations and exports last year to total company revenues more than doubled to 35 percent from 17 percent in 2004. Annualizing the sales contribution of NFL, this share will actually top 40 percent, manifesting a rapid reduction in the Company’s dependence on the Philippine market," SMC said in a statement.

SMC said operating income amounted to P17.5 billion, at par with 2004 results amid higher prices of raw materials, increased excise taxes on hard liquor, and one-time cost increases due to new packaging formats specifically for the softdrink and hard liquor businesses.

EBITDA (earnings before interest, taxes, depreciation and amortization), on the other hand, went up 13 percent to P30.3 billion.

SMC’s efforts to reinvigorate its brands and markets outside the Philippines have started to pay off in its international beer business whose consolidated operating income rose 33 percent in 2005.

Benefiting from a good market mix with particularly strong growth performance in the higher-margin market segments, SMCs international beer operations posted an eight percent gain in revenues and an 11 percent increase in volume. Growth has been exceptionally strong in Indonesia and Australia.

On the homefront, SMC’s beer operations registered a 10 percent increase from 2004 while operating income went up 13 percent due to effective cost management efforts.

In Australia, National Foods and juice maker Berri, which was folded into the former in December last year, combined for a revenue contribution of A$1.19 billion and operating income of A$105.6 million

For the entire San Miguel Food Group, consolidated revenues grew six percent to P61.1 billion while operating income increased 10 percent to P2.05 billion due to fairly stable selling prices and good volumes.