SMC's 2008 profit surges to P19.3 billion

MANILA, Philippines - Southeast Asia’s largest food and drink conglomerate San Miguel Corp. (SMC) posted a net income of P19.3 billion last year or more than double the P8.63 billion reported in 2007, boosted by asset sales.

Excluding non-recurring gains, San Miguel’s net earnings reached P7.22 billion, still up by four percent from the year ago level.

Ramon S. Ang, SMC president and chief operating officer, said: ”It’s been a significant year in the continuing strategic evolution of San Miguel Corp. with our company entering the power, energy and telecommunications sectors.”

“In a year when commodity costs were a challenge, our performance results are particularly encouraging, coming as they do from a combination of operating leverage and a tighter reining in on costs across all our businesses. Our core businesses continue to benefit from the strategic and operational improvements to the company which we believe have brought greater focus to each sector as they were increasingly managed as separate businesses with new avenues to growth via the equity markets or strategic investors,” Ang further said. 

During the period under review, San Miguel sold its stake in KSA Realty and some shares in local flagship brewery firm San Miguel Brewery Inc. (SMBI). It also sold its 35-percent interest in its packaging business to its long-time partner Nihon Yamamura Glass.

Consolidated sales revenue grew 14 percent to P168 billion from only P148 billion while operating income grew 26 percent to P14.8 billion.

Other income amounted to P6.66 billion.

Despite tough business conditions that resulted in higher costs, SMBI maintained its strong performance with its sales revenues rising 11 percent to P48.8 billion on the back of higher sales volume.

Overseas beer operations posted a turnaround from last year’s loss owing to steady gains in Indonesia, North China, Thailand, Hong Kong as well as beer exports.

San Miguel’s liquor and spirits subsidiary, Ginebra San Miguel, reported a nine-percent improvement in sales volumes.

The group’s packaging business also sustained its recovery on the back of robust demand for glass and plastic containers. Meanwhile, San Miguel’s food business registered a decline in sales volumes as a result of higher commodity costs.

Total revenues, however, went up by 15 percent to P73.2 billion, mainly driven by higher contributions from the poultry, feeds, flour, and value-added meats segments.

“Stepped-up raw material substitution programs and product innovation all helped keep the food sector afloat, as did the strength of San Miguel Pure Foods’ portfolio of brands and value-added products,” San Miguel said.