San Miguel net income down 60%

Conglomerate San Miguel Corp. (SMC) said profit in the nine months through September fell 60 percent to P7.5 billion following significant foreign exchange losses associated with its investments in the power sector.

Briefing materials from the company showed that foreign exchange losses during the period hit P12.3 billion, as the US dollar continued to strengthen in September.

This offset a 7-percent increase in net sales to P542.6 billion, which was attributed to the full consolidation of Petron Malaysia and increased revenues from San Miguel Pure Foods Co. Inc.

Excluding the effects of forex and one-off items, San Miguel’s recurring net income rose 15 percent to P11.1 billion.

Operating income also grew 25 percent to P46 billion due to  improved margins from Petron’s domestic operations, San Miguel Brewery’s international operations, the further trimming of Ginebra San Miguel’s operating losses, and sustained performances from Pure Foods and SMC Global Power.

“We have seen the peso start to appreciate against the US dollar beginning October, so we see a reversal of some of the foreign exchange losses,” San Miguel chair Eduardo Cojuangco Jr. said in a statement.

“Furthermore, the sale of the  Meralco [Manila Electric Co.] shares, expected to be completed before year-end, will yield additional income,” he said.

San Miguel in October sealed a deal to sell its remaining 27.1-percent stake in Meralco to the Gokongwei family’s JG Summit Holdings for about P72 billion.

The conglomerate, in July, unloaded an initial 5.7 percent stake in Meralco for about P17 billion.

In a separate statement, San Miguel said unit San Miguel Brewery Inc.’s nine-month consolidated sales revenues reached P53.6 billion, at par with last year. A price increase due to higher excise taxes on major domestic brands implemented last February affected volumes.

Operating income amounted to P15.4 billion, boosted by improved margins from international operations and cost control initiatives.

Ginebra posted sales revenues of P9.9 billion for the first nine months.

Volumes for flagship Ginebra San Miguel rose 53 percent from the second quarter to 4.8 million cases in the third quarter. This resulted to P3.9 billion in revenues, an improvement from the second quarter’s P3.1 billion. Operating losses were trimmed to P57 million in the third quarter, from higher losses during the first semester.

San Miguel Pure Foods brought in P71.4 billion in revenues, up 3 percent over the same period last year, on the back of improved performance from its branded value-added businesses. Operating income grew 14 percent to P3.7 billion on account of better margins.

SMC Global Power’s operating income grew by 14 percent  to P15.8 billion as a result of lower generation costs for its Ilijan and Sual power plants.

Consolidated total off-take volume reached 12,533 Gwh, up 3 percent from last year, mainly on Sual and Ilijan’s higher volumes from the Wholsale Electricity Spot Market and better generation volume for Sual, which experienced fewer forced outages.