SMC posts strong H1 results Diversified conglomerate clears P18.4 B in Jan-June

MANILA, Philippines - Food-to-infrastructure conglomerate San Miguel Corp. (SMC) returned to profitability in the first half amid the strong performance of its business units and lower interest expenses.

SMC reported a net income of P18.4 billion in the first semester, reversing last year’s P2.4-billion net loss due mainly to unrealized foreign exchange losses.

“The company took in P405 billion in total revenues in the first semester, a 13-percent improvement from 2013, as its power and fuels businesses delivered double-digit revenue growth and its traditional food and beverage units showed stable growth,” SMC said.

Operating income rose 14 percent to P33 billion due to significant second quarter gains in power and fuels while consolidated recurring earnings before interest, taxes, depreciation, and amortization improved 11 percent to P45.3 billion.

Specifically, San Miguel Brewery Inc.’s consolidated sales volume reached 102 million cases, marginally higher from the same period a year ago given the sustained domestic sales uptrend. Revenues inched up three percent to P37.7 billion.

Double-digit operating income growth from international operations, partially offset weaker domestic margins brought on by an increase in excise taxes at the start of the year, SMC said.

Revenues of liquor unit Ginebra San Miguel Inc. jumped 14 percent to P6.9 billion as  hard liquor volume sales hit 9.8 million cases, up seven percent from last year.

“Flagship brand  Ginebra San Miguel led volume sales growth, outpacing its 2013 performance by 21 percent to 8.1 million cases,” SMC said.

“The company also saw a huge turnaround in operating income, which reached P70 million on higher volumes and lower production costs and fixed operating expenses,” it added.

For the food business, San Miguel Pure Foods Co. Inc.’s consolidated revenues rose four percent to P49.2 billion as the agro-industrial and milling clusters delivered strong results, along with the dairy, fats and oils segment of its branded value-added business.

San Miguel Yamamura Packaging Corp. reported revenues of P11.5 billion, same as PET plant. SMC said operations in Malaysia also provided positive revenue growth as volume grew for most products, resulting in an eight-percent growth in operating income to P1.01 billion.

Power producer SMC Global Power posted a five-percent growth in consolidated offtake volume at 8,789 gigawatt-hours due to higher bilateral volume from Sual plant. Its consolidated revenues climbed 16 percent to P43.8 billion while operating income surged 36 percent to P14.9 billion.

Petron Corp.’s domestic and Malaysian operations delivered solid growth, generating revenues of P258 billion, higher by 18 percent from last year.

“The strong volume performance, combined with less volatile regional prices, translated to a 36-percent increase in operating income to P5.87 billion,” SMC said.

SMC said that all its infrastructure projects are proceeding as scheduled.

For instance, construction on the Tarlac-Pangasinan-La Union Expressway’s Section 2, running from Carmen to Urdaneta in Pangasinan, is on stream and is set to be completed by the end of the year. The remaining 26 kilometers of the total 88.6-km. project is slated for completion in 2016.

Improvement of the STAR Tollway is also ongoing while Construction on the NAIA Expressway is also in full swing, SMC said.

“Work on the extension of the runway at Boracay Airport is also on schedule, with preparation work ongoing for 800 out of the 850 meters interim runway extension which will bring total runway length to 1,800 meters,” SMC said.