SMC beer unit posts 25% income growth in first half

San Miguel Brewery Inc. (SMB), the flagship unit of Southeast Asia’s largest food and beverage conglomerate San Miguel Corp., said its income from operations improved 25 percent to P7.2 billion  in the first half of the year as sales volume and revenues posted modest growth.

In a statement issued yesterday, SMB said revenues reached P23.8 billion from January to June 2008, up 8.7 percent from P21.9 billion in the same period a year ago.

“Despite a more challenging economic environment and added pressure on the consumer’s disposable income, we’ve turned in very strong results. We continue to invest in brand building and are focusing on improving sales momentum and efficient execution across all distribution levels,” said Ramon S. Ang, president of SMB.

San Miguel beer brands San Miguel Pale Pilsen, Red Horse, San Mig Light and Gold Eagle are the top four brands in the country.

The company also offers popular brands such as Super Dry, Cerveza Negra, San Mig Strong Ice, Gold Eagle and Cali, the country’s only malt-based non-alcoholic drink.   

SMB, which contributes around 40 percent of group operating profit,  is undertaking new programs to offer wider availability and ensure consumer satisfaction. To conserve financial resources, programs to reduce inventory and trade receivable levels were also implemented alongside other cost saving programs.

The company earlier raised P6.16 billion (roughly $147 million) from an initial public offering of 770.524 million shares or five percent of the company. Of the total proceeds, P1.85 billion went directly to SMB which will be used to further strengthen its brand portfolio, expand its coverage and improve facilities and equipment.

Parent firm San Miguel said it would use other proceeds from the share sale to fund its planned foray into heavy industries like power, mining and infrastructure.

SMB has budgeted P700 million for its capital expenditures this year.