SMC likely to post P57B profit in ’13

SMC president Ramon S. Ang AP FILE PHOTO

Conglomerate San Miguel Corp. may post a P57-billion net profit in 2013, double the level in the previous year, due to extraordinary gains from the sale of its interest in power distributor Manila Electric Co.

SMC president Ramon S. Ang told reporters on Monday that SMC earlier estimated that net profit for 2013 would likely come in at P39 billion.

But based on the latest assessment, he said last year’s bottom line may end up at P57 billion with the full booking of gains from the sale of shares in Meralco.

For 2014, Ang said he could not say whether earnings would be better.

“If we sell something, it may even surpass 2013,” he said in a briefing during the listing by way of introduction of SMC’s controlling stockholder, Top Frontier Investment Holdings.

For the January to September 2013 period, SMC’s net profit fell by 60 percent year on year to P7.5 billion as foreign exchange losses associated with its investments in the power sector gnawed at the bottom line.

The conglomerate incurred P12.3 billion in foreign exchange losses following the strengthening of the greenback against the peso during the nine-month period.

Proceeds from the Meralco deal are, however, seen to shore up earnings in 2013. In December last year, the SMC group completed the sale of its 27-percent stake in Meralco to the Gokongwei group for P72 billion.

SMC unloaded its interest in Meralco at P235 per share involving about 305.69 million shares.

Excluding extraordinary gains, Ang said SMC had a “very stable” cash flow as measured by its earnings before interest, taxes, depreciation and amortization (Ebitda) worth $2 billion per year.

“And with our Petron refinery upgrade, which is about to run, the company has a very good future. Once the Petron refinery upgrade runs, it will give us $800 million in Ebitda for Petron alone. Then, the other generating plants and businesses of SMC are continuously improving,” Ang said.

“If you noticed, our earnings in SMC have been on an uptrend for the last 15 years,” Ang said.

Meanwhile, Ang affirmed plans by SMC to sell 49 percent of its power generation unit SMC Global Power Holdings Corp. for as much as $1 billion through an initial public offering this year.

“For power investment, we will go for listing definitely this year and we hope that other businesses that are mature and ready to share to the public, we will go for listing,” Ang said.

The 49-percent stake to be sold by SMC, Ang said, would already include potential placement by strategic investors. Doris C. Dumlao

Originally posted: 3:13 pm | Monday, January 13th, 2014