San Miguel sizzles; Iran war worsens

You will know if a company is properly managed or not by how it behaves or thrives in good and bad times, especially in bad times.

Beer, beverages, food, infra, power and petroleum refining behemoth San Miguel Corp. has shown how strategic visioning, management discipline and marvelous execution produce the resilience needed for it not just to thrive, but to prosper and be the market leader in nearly every sector of its vast portfolio of businesses.

SMC is the Philippines’ largest company in terms of sales – P1.5 trillion a year. More than P800 billion of that are sales from Petron Corp., its 76 percent-owned subsidiary.

When the Iran war erupted on Feb. 28, 2026, the share price of Petron leaped 9.6 percent from its Feb. 27, 2026 closing of P2.81 to close at P3.08. As of March 18, Petron’s share price was P3.15, up 13.5 percent from P2.81. The market reads that the Iran war will reap dividends for Petron.

In 2025, Petron profits swelled 84 percent to a record P15.6 billion from P8.5 billion in 2024 despite a 6.7 percent drop in revenues to P810 billion (from P868 billion) due to lower oil prices.

If current crude levels of $110 per barrel and above hold, up 57 percent from $70 before the war, expect Petron revenues to reach a record P1 trillion, enabling parent company San Miguel Corp. to scale a new high P1.7 trillion in revenues.

Petron is the Philippines’ only petroleum refinery. Its close competitors Shell and Chevron shut down their refineries years ago. Petron, under CEO Ramon S. Ang, instead of closing its Bataan facility, launched an aggressive expansion and efficiency optimization. He invested $3 billion to make Petron’s refinery one of the most modern, most efficient and most profitable in the region. It gets its crude for local refining from Saudi Aramco. Its Port Dickson Refinery in Malaysia gets its crude from Exxon Mobil and Shell. Petron has 39.2 percent market share, with 1,800 Philippine retail outlets. About 400 participants compete for the remaining 40 percent.

“The company believes that its competitive advantages include organization, technology, assets, resources and infrastructure. The company continues to implement initiatives aimed at improving operational efficiencies, managing costs and risks and maximizing utilization of its assets and opportunities,” says Petron in its recent P32-billion bond offering.

SMC’s share price closed at P70 on March 18, 2026, up 2.94 percent from its Feb. 27, 2026 closing. SMC closed at P69.95 per share on Friday, March 20. In contrast, between Feb. 27, 2026 and March 18, oldest conglomerate Ayala Corp.’s share price declined 12.5 percent from P600 to P525; that of SM Investments Corp. dropped by 11 percent, from P705 to P627, reflecting war challenges and uncertainties. SMIC is the legendary taipan Henry Sy’s holding company and the most valuable company in market cap.

“We are in good stead,” beamed SMC chair and CEO Ramon S. Ang when I asked him about the risks and challenges posed by the war.

SMC bested its top two rivals SMIC and Ayala Corp. in net income and net income growth despite reporting a decline in net revenues in 2025 to P1.5 trillion, from P1.57 trillion in 2024.

SMC reported net income of P94.7 billion in 2025, a whopping 81 percent jump from 2024’s P52.3 billion profits, beating the P90-billion net of SMIC which was up 10 percent from 2024’s P82.6 billion, a record, and Ayala Corp.’s P48.3 billion, which was up seven percent, from P45 billion in 2024, the property, telco and banking conglomerate’s previous best year.

SMC’s 2025 core net income surged 52 percent to P79.6 billion. “We had a clear focus on execution,” said Ang, explaining SMC’s spectacular performance amid a severe economic downturn in 2025 when GDP growth nosedived to 4.4 percent, from 5.7 percent in 2024, a drop of 22 percent in rate or P1.3 trillion in value of output of goods and services.

SMC’s P1.5-trillion sales are equivalent to 5.2 percent of estimated 2025 GDP of P28.5 trillion.

Ang also attributes the conglomerate’s performance to a diversified portfolio, improved margins and disciplined investment strategies that allowed the group to navigate volatile market changes, including softer crude prices.

AI highlights SMC’s 2025 performance under Ang’s leadership:

Financial growth: Consolidated revenues reached P1.5 trillion, with operating income increasing by 13 percent to P181.6 billion and EBITDA rising 16 percent to P262 billion.

Food & beverage: San Miguel Food and Beverage Inc. (SMFB) reported a 13 percent increase in consolidated net income to P46.3 billion, driven by record performance in the food unit, strong poultry demand and increased international beer sales.

Power: San Miguel Global Power saw a 290 percent surge in net income to P48.3 billion, heavily supported by a P21.9 billion one-off gain from the Chromite transaction, despite a 23 percent drop in revenue due to the divestment and deconsolidation of the Ilijan and EERI power plants.

Fuel: Petron Corp. recorded an 84 percent increase in net income to P15.6 billion, driven by improved refinery efficiency.

Strategic focus: Ang emphasized a clear focus on execution and continues to prioritize major infrastructure projects, including the completion of the New Manila International Airport (NMIA) in Bulacan, first runway targeted for 2028.

Meanwhile, on Iran war’s fourth week, three disturbing narratives have emerged:

1) The US seems to be at the losing end of the largest, most expensive asymmetric war, with Iran proving its resilience to heavy bombardments of the best war technology ever employed;

2) The war will last longer than earlier worst-case scenarios. Donald Trump has asked Congress for a $200-billion additional war budget. At $1 billion per day of war expenditures, $200 billion is good for 200 days or at least six months.

3) Trump has a colossal ego and is a notoriously bad loser. He won’t accept defeat. He will go on a rampage. To hell with everyone.

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