San Miguel first-semester net income grows by 31%

Conglomerate San Miguel Corp. grew its first semester profit by 31 percent year-on-year to P14.1 billion on the back of higher operating income from its beer, power and packaging businesses.

The operating income growth posted by San Miguel Brewery, San Miguel Global Power and San Miguel Packaging offset the decline in the operating earnings of San Miguel PureFoods Co. and Petron Corp., and the net loss posted by hard liquor unit Ginebra San Miguel.

Groupwide sales revenue in the first semester rose by 25 percent year-on-year to P329.5 billion.

Despite the rise in input costs for some of its businesses, SMC chair and chief executive officer Eduardo Cojuangco Jr. said the group’s highly diversified portfolio provided fresh growth drivers that enabled the company to turn in strong results.

“Our first semester financial results provide a glimpse of the importance of a diversified portfolio and the continuing value of our core businesses to the overall stability of the group,” Cojuangco said.

With higher crude and raw material prices resulting in slimmer margins, operating income hit P25.1 billion, down 20 percent from a year ago.

Consolidated recurring cash flow based on earnings before interest, taxes, depreciation and amortization hit P38.4 billion.

The group, in a statement, provided the following highlights of its members’ performance in the first semester:

SMB improved its consolidated operating income by 6 percent to P10.8 billion, while consolidated revenues rose by 4 percent to P36.9 billion. International operations posted double-digit revenue growth.

SMC Global Power grew its operating income by 17 percent to P8.8 billion. Net generation volume reached 8,081 gigawatt hours, up 12 percent. Consolidated net revenues grew by 11 percent to P39.5 billion.

San Miguel Pure Foods’ operating income fell by 38 percent to P1.86 billion, although revenues improved by 7 percent to P45.3 billion.  Higher raw material prices and limited supply of cassava early this year gnawed at earnings.

San Miguel Packaging Group grew its operating income by 5 percent to P1.12 billion. Revenues reached P11.9 billion, slightly lower than 2011 levels as offshore operations were weighed down by slower global economic growth.

Ginebra San Miguel incurred an operating loss of P157 million, lower than the P186 million loss a year ago. Its revenues reached P7.2 billion, 12 percent lower than 2011 level. The volume for flagship Ginebra San Miguel, however, surpassed year-ago levels by 13 percent. Second quarter volumes have also narrowed the gap versus last year.

It was earlier reported that its oil refining business, through Petron Corp., posted a 60-percent decline in operating profits to P4.4 billion. Consolidated revenues grew by 43 percent to P193.3 billion year-on-year with the consolidation of the second quarter revenues of its Malaysian operations. Consolidated net income, however, dropped to P432 million, significantly lower than the P6.04 billion posted in the same period in 2011 due to volatility in global oil markets. Excluding the second quarter loss of Petron Malaysia, Petron Philippines posted a net income of P1.99 billion in the first half.