San Miguel net income drops 13% to P17.5 billion

MANILA, Philippines - Diversifying conglomerate San Miguel Corp. (SMC) reported a 13 percent drop in net income last year to P17.5 billion, from P20 billion in 2011, largely due to the absence of one-time gains.

Excluding non-recurring items, SMC’s 2011 net income grew 36 percent to P17.3 billion, which the conglomerate attributed to the full consolidation of its fuel and power businesses coupled with the steady growth in traditional food and beverage businesses.

In 2010, SMC booked P4.1-billion gain from the consolidation of power generation interests in SMC Global Power. 

SMC chalked in consolidated sales revenues of P536 billion last year, or more than double the P246 billion registered the previous year, as contributions from oil refiner Petron Corp. and San Miguel Power grew six-fold, accounting for 63 percent of total revenues.

Operating income likewise surged 62 percent to P56 billion while recurring EBITDA climbed 47 percent to P77.2 billion.

Despite lower Wholesale Electricity Spot Market (WESM) prices, SMC Global Power registered an eight percent increase in net sales to P71.445 billion. Consolidated operating income went up three percent to P16.72 billion. The company generated a total of 14.5 megawatthours, 31 percent higher than the year before.

Petron, meanwhile, reported a seven percent rise in net income to P8.47 billion on the back of a 20 percent jump in sales from P229.09 billion to P273.96 billion. Income from operations climbed 19 percent to P14.8 billion.

The oil refining giant expects to generate savings once the first phase of the new power plant at its Bataan refinery comes online by early 2013. 

Local beer giant San Miguel Brewery Inc. posted net earnings of P12 billion, higher than the P11.8 billion reported a year earlier, as revenues increased six percent to P71.91 billion due to stable growth and improvements in its domestic and international operations. Operating income expanded 10 percent to P20.5 billion.

The food group, through San Miguel Pure Foods Co. Inc. reported a four percent hike in net income to P4.1 billion as revenues reached an all-time high of P89.6 billion, driven by increased demand, aggressive distribution expansion, new products and highest export sales.

Hard liquor unit Ginebra San Miguel Inc., meanwhile, had a difficult year, brought about by aggressive competition, cost increases and customer shift to lower alcohol-proof products.

It reported a 33 percent drop in net sales to P15.11 billion as sales volume fell 37 percent to 25 million cases.

With the launch of its lighter-proof products and intense marketing efforts, Ginebra foresees a recovery this year.  

San Miguel Yamamura Packaging Group registered revenues of P24.1 billion, three percent higher than year-earlier level on the back of increased exports and growth in domestic and international revenues. Despite higher fuel and raw material costs, operating income improved eight percent to P2.2 billion.

Meanwhile, SMC disclosed that its infrastructure projects are well on track with the rehabilitation of the existing Boracay Airport terminal in Caticlan already completed. Technical plans are now being finalized for the extension of the runway.

SMC said the Tarlac-Pangasinan-La Union Expressway (TPLEX) is likewise expected to bring in revenues by the fourth quarter of the year when the 16-kilometer Tarlac-Gerona stretch opens.

The conglomerate recently acquired a 46.5-percent stake in Atlantic Aurum Inc., through a joint venture between wholly-owned subsidiary San Miguel Holdings Corp. and the Citra Group. With this investment, SMC now holds interest in the Skyway and South Luzon Expressways which together have an estimated annual EBITDA of about P7 billion.