SMC sales up 30% in first two months

Food and beverage giant San Miguel Corp. registered a 30-percent growth in sales to P38.8 billion in the first two months of the year, driven by the strong performance of its overseas and domestic units as well as a successful cost-cutting program.

San Miguel said the increase in sales translated to a four- percent gain in net profit during the period under review to P988 million. Operating income, meanwhile, amounted to P3.03 billion or an increase of 50 percent from the year- ago level.

In a statement released yesterday, San Miguel said recent acquisitions — Australian dairy giant National Foods Ltd. and juice maker Berri Ltd. — contributed $268 million to San Miguel’s total sales for the two-month period. National Foods is San Miguel’s biggest purchase to date and is part of a strategy to seek future growth abroad after dominating its home market for beer, soft drinks, liquor, poultry, dairy, and processed food.

Lower cost of raw materials also contributed significantly to increased sales, San Miguel said.

San Miguel said its flagship domestic beer operations registered an eight percent increase in revenues to P7.78 billion. Operating income, meanwhile, rose 10 percent to P1.69 billion.

On the international front, San Miguel’s beer sales amounted to $43.1 million, up six percent from the previous level, mainly due to a 14 percent improvement in sales volume.

"The positive volume performance was brought about by strong results from breweries in Greater China and from exports operations," San Miguel said.

Banking on the continued strong performance of its core businesses and the growth potential of its Australian businesses, San Miguel sees better profits this year. In 2005, San Miguel reported a net profit of P9.15 billion, up 3.3 percent from a year earlier.

San Miguel has been expanding overseas to cut its dependence on sales at home, where it controls 70 percent of the softdrinks market and 70 percent of processed meat sales.