SMC profit soars 42% to P38.1 B

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) posted a hefty profit growth last year as gains from its divestment in Manila Power Co. (Meralco) offset the huge foreign exchange losses.

In a statement SMC said its consolidated net income climbed 42 percent to P38.1 billion, driven by a P40-billion gain from its sale of Meralco shares.

“These earnings completely offset unrealized foreign exchange losses amounting to about P15.6 billion, brought about by the strengthening of the US dollar in the second half of 2013,” SMC said.

Without the unrealized forex losses, net income would have surged 210 percent to P53.6 billion, SMC said.

Last September, JG Summit Holdings Inc. of the Gokongwei family struck a deal to buy a 27-percent stake in Meralco for P72 billion from SMC. It marked the exit of SMC from the utility giant, allowing it to focus on various investment opportunities such as infrastructure projects and oil and gas acquisitions.

In 2013, consolidated revenues improved seven percent to P748 billion, with new businesses accounting for 70 percent of total revenues.

The conglomerate said both core and new businesses brought stable margins and healthy cash flow. The core beverage, food, and packaging businesses posted moderate growth at two percent.

Consolidated operating income grew seven percent to P55.1 billion “on the back of strong margins from the beer and power businesses and the sustained performance of Petron and San Miguel Pure Foods Co. Inc. (SMPFC),” SMC said.

In particular, the beer business, through San Miguel Brewery Inc., was negatively affected by higher excise taxes that resulted in a nine-percent drop in volume to 204 million cases while revenue was flat at P75.1 billion.

The new excise tax regime, which nearly doubled for hard liquor, also lowered volumes for Ginebra San Miguel Inc., SMC said.

Ginebra’s consolidated revenues grew three percent to over P14 billion while posting P793 million in operating losses.

Revenues of SMPFC rose four percent to almost P100 billion, driven mainly by the strong performance of the branded value-added businesses.

San Miguel Yamamura Packaging Group accounted for P25.2 billion in revenues while its operating income hit P2.1 billion in 2013, SMC said.

Consolidated revenues for SMC Global Power Holdings Inc. reached P74 billion due to lower prices in the wholesale spot market.

“Total off-take volumes of 16,163 gigawatt-hours were slightly better than the previous year due to better utilization of the Sual power plant,” SMC said.

SMC Global’s income from operations improved 20 percent to P20.5 billion due to lower generation costs for Sual.

Oil refiner Petron Corp. said its consolidated revenues rose nine percent to P464 billion on the full consolidation of Petron Malaysia, which contributed P183 billion to total revenues.

Total volumes reached 81.5 million barrels, up 10 percent from a year ago, with Petron Malaysia contributing 34.4 million barrels.

The conglomerate also reported progress on various infrastructure projects.