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San Miguel net profit rose 61%

Group benefiting from diversification

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San Miguel Corp. Wednesday reported a sharp increase in its nine-month earnings due mainly to the contributions from its new business units as well as gains from a favorable foreign exchange environment.

The country’s biggest conglomerate in terms of market capitalization said its net income for the January-to-September 2012 period rose to P19.2 billion from P11.9 billion in the same period last year—a jump of 61 percent.

“Operating income reached P37.8 billion, 9-percent lower than 2011, but still a notable improvement over first semester figures, with Petron posting improvement starting August, and the food group sustaining improved profitability during the third quarter,” it said.

Consolidated recurring earnings before interest, taxes, depreciation and amortization (Ebitda) stood at P55 billion during the period.

In recent years, San Miguel had diversified aggressively into businesses far from its traditional food and beverage concerns. Its new areas of growth included petroleum, power, infrastructure and, recently, the airline business after it acquired a 49-percent stake in flag carrier Philippine Airlines.

The company said that revenues for the first nine months reached P509.2 billion, a 29-percent increase over group-wide sales reported in the first nine months of 2011.

In the energy sphere, SMC Global Power reported a 7-percent growth in consolidated revenue to P57.4 billion. Operating income was placed at P13.9 billion, up 26 percent from last year due to a combination of higher revenue and a decline in operating expenses.

Petron sold 53.2 million barrels in the first nine months of 2012, or 55 percent more than in the same period last year. Strong domestic demand resulted in a 4-percent increase in volume at 35.6 million barrels. Petron Malaysia posted a significant contribution with 17.6 million barrels sold.

Consolidated revenue for the petroleum refiner and distributor amounted to P307.3 billion, a 52-percent increase over last year.

At the same time, San Miguel said that the “execution of identified growth strategies for newly acquired Philippine Airlines (PAL) continues.”

Recently, the flag carrier signed the biggest aircraft deal in the country’s history with Airbus, ordering a total of 65 aircraft for delivery over the coming years to implement its re-fleeting and expansion programs.

On Wednesday, the company said that consolidated revenue for San Miguel Brewery Inc. from January to September 2012 amounted to P53.8 billion, up 3 percent from the previous year with volume sales totaling 164 million cases.

Its international beer operations and exports business also continued to post strong revenue growth. “Management of fixed costs for beer domestic and improved operating performance for the international business resulted in a 5-percent increase in SMB’s operating income, which reached P15.4 billion,” it said.

Recently, San Miguel president Ramon Ang said the conglomerate was in the final stages of making a bid for an unnamed $5-billion company with operations around the region.

The group was also in talks with Cayman Airways—owned by the government of the Cayman Islands—for a stake in the airline to solve the regulatory prohibition for Philippine Airlines to increase its flights to the US mainland due to weaknesses in the local aviation regulator.


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