San Miguel Corp. grew its first-semester net profit by 72 percent year-on-year to P10.8 billion on the back of earnings from its power-generation and oil-refining businesses.
In a disclosure made Friday, SMC also announced the board’s approval to sell a 5.2-percent stake in power retailer Manila Electric Co. to its food unit San Miguel Pure Foods Co. for about P13 billion. Also approved was the preparation for its power unit SMC Global Power Holdings Corp. to undertake an initial public offering within the year.
The SMC board agreed to sell 59.09 million of the company’s shares in Meralco for P220 a share. “The shares sold by the company to SMPFC form part of the shares bought from the Government Service Insurance System,” the SMC disclosure said.
This implies that SMC will still keep 21.8 percent of its 27-percent stake in Meralco. The conglomerate earlier acquired the Meralco block from GSIS for P90 a share over a three-year repayment period that was completed recently. Effective cost including interest amounted to about P100 a share, based on industry estimates.
On its six-month earnings report, SMC’s cash flow as measured by earnings before interest, taxes, depreciation and amortization (Ebitda ) rose 117 percent to P40.2 billion while group-wide revenues surged 168 percent to P263.3 billion. Consolidated operating income was up 136 percent to P31.5 billion.
Strategic shift
“We are continuously benefiting from our strategic shift to high-growth businesses. We are confident we can bring in more value to our shareholders from the company’s ongoing diversification,” said SMC chair Eduardo Cojuangco Jr.
Its energy unit San Miguel Global and oil refining firm Petron Corp. together accounted for 63 percent of San Miguel’s total revenue pie.
San Miguel’s energy arm reported a 72-percent year-on-year jump in consolidated operating income for the first half to P7.7 billion.
Petron generated a six-month net profit of P6 billion, up 105 percent year-on-year, on the back of a 62-percent surge in operating income to P10.8 billion. This was attributed to strong sales of higher-margin petrochemical products along with an increase in export volumes.
Traditional businesses also continued to be a major contributor to San Miguel’s total turnover. Higher beer volumes in both domestic and international markets together with effective sales initiatives boosted San Miguel Brewery’s consolidated revenue by 7 percent to P35.6 billion. SMB’s operating income likewise rose 8 percent to P10.2 billion.
Pure Foods, benefiting from higher volumes and improved selling prices, reported first-semester consolidated revenue of P42.3 billion, up 11 percent from a year ago. The food unit’s operating income was up 8 percent to P3 billion as a result of continuous cost-reduction programs and efficiency improvements, the company said.
Despite a similar spike in cost of raw materials and competitive pricing in the export market, San Miguel Yamamura managed to grow revenues by 4 percent in the first half to P12 billion from a year ago.