Hard liquor-maker Ginebra San Miguel Inc. (GSM) sees net profit this year doubling to P1.2 billion, sustaining a strong recovery that began last year.
In a press chat after the company’s stockholders meeting on Thursday, GSM president Ramon S. Ang said the company had committed a double-digit growth in both sales volume and profitability this year. He added the bottom line would likely reach P1.2 billion from the seven-year high of P602 million posted last year.
In the past year, GSM devoted considerable resources to mitigate the mounting cost of input materials, particularly alcohol and bottles which constituted its major cost drivers.
“We worked at advancing our capability to increase alcohol yield at our distillery. In the area of raw material sourcing, we sought out more economical sources of molasses and alcohol,” GSM chair Eduardo Cojuangco Jr. and GSM general manager Emmanuel Macalalag said in a report to shareholders.
“We also expanded our second-hand bottle supply network. These moves have had a significant impact on our operations and have stabilized our margins,” the report said.
Macalalag told shareholders GSM had thus recovered from the “missteps” in the past and should be on a “profitable” and “durable” path in the years ahead.
“For 2018, we will continue to work on building brand equity, improving the distribution of key brands, and extracting more efficiency throughout our supply chain,” he said.
Over the medium term, GSM is looking to expand its portfolio, which includes gin, Chinese wine, vodka, brandy and rum. The flagship product Ginebra San Miguel is seen to be its passport into new markets and future growth opportunities, such as in international markets. —DORIS DUMLAO-ABADILLA