San Miguel to write off P1B of Monterey assets
By Daxim Lucas
Philippine Daily Inquirer
First Posted 02:38:00 05/13/2008
Beverage and food giant San Miguel Corp. said Monday it would write off a significant amount of assets of one of its subsidiaries as part of preparations to consolidate its food companies under a separate, publicly listed entity.
In a text message to the Philippine Daily Inquirer, San Miguel president and chief operating officer Ramon Ang said P1 billion worth of assets would be written off from the books of Monterey Piggery, a unit of San Miguel subsidiary Monterey Foods Corp.
The company blamed the write-off for its failure to meet the April 14 deadline for submission of 2007 financial statements to the Securities and Exchange Commission and the Philippine Stock Exchange.
Ang described the company’s move as a “cleanup in preparation for San Miguel Food’s listing.”
He had earlier said that the conglomerate—as part of its move to diversify into other business lines—would consolidate, spin off and list all its food businesses under a single corporate entity.
Inquirer sources in the auditing sector familiar with the issue revealed that the amount of asset write-off could reach P2.5 billion, based on preliminary results of a “re-audit” of the Monterey books.
“It looks like they have uncovered some questionable inventories of Monterey and some receivables, also,” a source said, requesting anonymity because he was not authorized to speak on the issue.
San Miguel earlier told the stock exchange that it would have to restate its financial reports for 2005 and 2006—and consequently report lower earnings for 2007—because of the inventory cleanup.
Before 2007, SGV & Co. acted as San Miguel’s external auditor.
Reached for comment on Monday, SGV managing partner David Balangue said he was in the process of verifying with associates the veracity and accuracy of the report.
Last month, San Miguel told the stock exchange that Monterey had overstated its net income and retained earnings figures in the past two years, which caused a delay in the release of its financial statements.
This was due to “certain adjustments made by Monterey, affecting its receivables and inventories,” chief financial officer Ferdinand K. Constantino said in a statement.
Because of this, he said, Monterey will have a smaller 2007 net income and smaller 2006 retained earnings. With editing by INQUIRER.net
|
