SMC recurring profit up 31% in 1st quarter

SAN MIGUEL CORP. (SMC) grew its consolidated recurring profit by a third in the first quarter of 2018, fueled by the performance of its liquor, beer, food, packaging, and fuel businesses.

The diversified conglomerate booked a consolidated recurring net income of P19.4 billion for the first three months of the year, up by 31% from the same period a year ago, it said in a statement on Thursday.

This followed a 20% jump in revenues to P234.3 billion. Operating income accordingly climbed 19% to P32.7 billion for the period.

Revenues of Petron Corp., SMC’s fuel and oil unit, improved by 21% to P129.1 billion, versus the P106.4 billion posted in the same period a year ago. The company saw strong domestic sales volumes and improved operating efficiencies in the Philippines and Malaysia, resulting to a 4% uptick in net income to P5.8 billion.

San Miguel Food and Beverage, Inc. ( SMFBI), previously known as San Miguel Pure Foods Co., Inc. (SMPFC), delivered P29.3 billion in revenues, 12% higher year on year. The company attributed this to the strong growth momentum of its poultry and meats and value- added meats businesses, boosted by higher selling prices and better volumes.

Higher costs of major raw materials, however, tempered the unit’s profit growth, which ended 7% lower to P1.4 billion.

“( The decrease) was primarily due to foreign exchange losses caused by the peso depreciation against the US dollar along with market- to- market losses from raw material imports,” SMC said.

Excluding foreign exchange losses, SMC said SMFBI’s net income would have been slightly higher at P1.5 billion.

San Miguel Brewery, Inc. generated P29.8 billion in revenues for the quarter, as it sold 65 million cases. The company benefited from new marketing campaigns and the implementation of trade and consumer promos. Net income for the beer unit went up 26% to P5.7 billion.

Ginebra San Miguel, Inc.’s sales volumes went up by a fifth for the three months as well, as the company implemented campaigns to boost core brands Ginebra San Miguel and Vino Kulafu. Revenues then rose 24% to P6.4 billion, with net income reaching P255 million, 97% higher year on year.

SMC recently merged its liquor and beer businesses with SMPFC. The group is set to conduct a $3.6-billion follow-on offering this year, in order to meet the minimum public ownership requirement for the newly consolidated firm as it currently only has a public float of 4.13%.

Meanwhile, sales revenues of San Miguel Yamamura Packaging Group expanded by 25% to P8.6 billion, following higher sales of glass plastics, and flexibles. The company also noted the continued growth of its Australian operations.

Shares in SMC picked up 80 centavos or 0.59% to close at P136.80 each at the Philippine Stock Exchange on Thursday. —