San Miguel net income down 6% in first 9 months

San Miguel Corp. posted a 6-percent year-on-year drop in net profit for the first nine months to P11.9 billion largely due to one-time gains from the consolidation of power businesses that propped up comparative earnings last year.

Excluding nonrecurring items, SMC’s core net income for the January-to-September period rose 41 percent to P11.6 billion, which the company attributed to significant contributions from its fuel and power businesses as well as steady growth in traditional food and beverage businesses.

The major nonrecurring item booked by SMC in 2010 was a P4.1-billion gain from the consolidation of power-generation interests in SMC Global Power. As SMC raised its interest in the power unit to 100 percent from 40 percent, thereby completing its transformation from a food- to a power-based conglomerate, it booked some revaluation gain in the comparative period last year.

On the other hand, the difference between SMC’s reported and core net income in the first nine months of 2011 was due to nonrecurring gains from the sale of its interest in the 620-megawatt diesel-fired Limay power plant. This transaction was recognized by SMC in its books last August.

SMC’s nine-month consolidated sales revenue reached P393.4 billion, rising by 143 percent from last year’s level. Consolidated operating income likewise surged 112 percent to P42 billion compared with a year ago.

Oil refining unit Petron Corp. grew its net income by 42 percent to P7.6 billion. Revenues grew 19 percent to P202 billion due largely to an increase in exports and sales of higher-margin petrochemicals.

San Miguel Brewery Inc. grew revenues by 7 percent to P52.1 billion as volume sales rose 3 percent to 165.8 million cases.

San Miguel Food group boosted net revenue sales by 11 percent to P64.3 billion on the back of higher volumes and higher average selling prices. Operating income rose 2 percent to P4.3 billion.

San Miguel Yamamura Packaging reported consolidated sales revenue of P17.7 billion, up 4 percent while operating income grew 8 percent to P1.6 billion.

Ginebra San Miguel saw a 31-percent drop in net revenue sales to P11.5 billion due to soft demand for liquor products.

SMC chair and chief executive officer Eduardo Cojuangco Jr. said in a statement that the group has made significant strides in its diversification strategy. In August, SMC signed a deal to acquire Exxon Mobil’s downstream business in Malaysia, which included a 65-percent stake in Esso Malaysia Berhad, 100 percent of ExxonMobil Borneo Sdn Bhd and ExxonMobil Malaysia SDN Bhd.

Likewise underway are preparations for the expansion of the Boracay Airport in Caticlan, Aklan, the first airport privatization project in the country.