SMC’s Purefoods reports lower income

MANILA, Philippines - The food and beverage unit of diversified conglomerate San Miguel Corp. (SMC) recorded slightly lower earnings last year despite the improvement in sales.

In a disclosure, San Miguel Pure Foods Co. Inc. (SMPFC) said net income attributable to equity holders of the parent firms slipped nearly three percent to P4.1 billion from P4.22 billion in 2012.

SMPFC said it posted P99.8 billion in consolidated revenues for 2013, a four-percent increase over last year.

“The growth was driven by the strong performance of its core brands,” SMPFC said, adding that operating income improved six percent to P5.5 billion.

“We are happy with the way that SMPFC has been able to generate savings and invest this in key strategic areas of focus that can grow operating profit and margins, specifically in the areas of distribution, and logistics represented by the new grains terminal,” said SMC president and SMPFC vice-chairman Ramon S. Ang.

In 2013, the agro-industrial cluster recorded a four-percent increase in operating income while the feeds business grew its revenues by three percent due to higher selling prices and better sales mix, the listed firm said.

“On the other hand, the poultry and fresh meats business posted a combined volume and revenue growth of four percent and five percent, respectively,” SMPFC said.

It allowed the company to buck the challenging year as supply picked up faster than demand, SMPFC said, adding that the fresh meats business performed strongly due to improvements in hog growing efficiencies and favorable market prices.

The flour business’ revenues increased four percent due to better sales volume while sales revenues of the branded value-added business rose eight percent driven by higher sales of Purefoods, Star, Magnolia and San Mig Coffee.

“New product launches and sustained advertising and promotional activities also contributed to growth,” SMPFC said.

“Moving forward, our focus for the food group will be to strengthen existing businesses in core segments like the branded business, and drive even higher levels of value-added innovation across each of our product categories,” Ang said.

Last year, SMPFC inaugurated its P3-billion grain terminal in Batangas that would allow the company to enjoy lower freight costs and terminal fees.

The company’s board of directors yesterday approved the declaration of P48 per common share cash dividends for shareholders as of Apr. 11, payable on May 12.