San Miguel Corp. net profit dipped 13% to P17.5B in 2011—report

MANILA, Philippines—Conglomerate San Miguel Corp. saw a 13-percent decline in net profit in 2011 to P17.5 billion in the absence of non-recurring items that propped up its bottom line in the previous year.

But taking out the effects of the one-time gain from the acquisition of the SMC Global Power and foreign exchange gains in 2010, SMC’s recurring net income attributable to equity holders of the parent company increased by 36 percent to P17.3 billion in 2011.

The increase in recurring earnings was due to the full consolidation of two new businesses, along with growth from its beer and food subsidiaries, SMC reported on Wednesday.

Cash flow based on earnings before interest, taxes, depreciation and amortization also grew by 47 percent to P77.2 billion from a year ago.

In 2010, SMC’s attributable net income amounted to P20.1 billion including one-time gain on foreign exchange, acquisition of the power subsidiary and loss on impairment on the non-current assets of its operations in China and Hong Kong.

Consolidated sales revenues reached P536 billion in 2011, 118 percent higher than the year before, which was attributed by SMC to significant revenue growth from oil-refining and power-generation units. Contribution from its new businesses grew sixfold, accounting for 63 percent of total revenues for the year.

SMC’s operating income rose by 62 percent to P56 billion. Consolidated net income before non-controlling interest in 2011 amounted to P28.5 billion, 18 percent higher than a year ago.

The various operating units of SMC performed in 2011 as follows:

* SMC Global Power posted a consolidated operating income of P16.7 billion as it generated a total of 14.5 million megawatt hours (MWh) for the year, up by 31 percent. Bilateral off-take volumes were higher for the Sual and Ilijan power plants while San Roque was able to maximize its capacity due to increased water supply.

Despite lower Wholesale Electricity Spot Market prices, revenues increased by 8 percent to P71.4 billion.

* Oil refiner Petron Corp. posted a net income of P8.5 billion (up 7 percent). Revenues rose by 20 percent to P274 billion, translating to a 19-percent improvement in operating income to P14.8 billion. The company expects to generate savings once the first phase of the new power plant at the Bataan Refinery comes on stream by early 2013.

* San Miguel Brewery chalked up a net profit of P12 billion (up 17 percent) on the back of a 6-percent growth in revenues to P71.9 billion.

* San Miguel Pure Foods Co. Inc. grew its operating income by 4 percent to P6.1 billion while net income reached P4.1 billion (up 4 percent) as higher volume and selling prices made up for increases in input costs.

* San Miguel Yamamura Packaging Group posted a 3 percent revenue growth to P24.1 billion on increased exports and growth in domestic and international revenues. Despite higher fuel and raw material costs, operational improvements boosted operating income by 8 percent to P2.2 billion.

* Ginebra San Miguel Inc. had a difficult year brought about by aggressive competition, cost increases and customer shift to lower alcohol-proof products. With the launch of its lighter-proof products and intense marketing efforts, the company foresees recovery this year.