San Miguel net profit declined in first quarter

The net profit of San Miguel Corp. in the first quarter reached P4.2 billion, 50 percent lower that of a year ago as equity contributions from its beer brewery, hard liquor, oil refinery and airlines businesses declined.

The drop in first quarter attributable net profit was also brought on by higher interest expenses, apart from the higher base of foreign exchange gains that boosted comparative earnings in 2012. But three-month consolidated revenues grew by 25 percent year-on-year to P178.3 billion, the conglomerate yesterday said in a statement.

Net income before controlling interest also declined by 34 percent to P7.59 billion from that of the previous year.

Consolidated operating income amounted to P15.4 billion, up by 7 percent from the same period last year, driven mainly by SMC Global Power and the improved performance of other units, particularly the food business.

SMC said external factors, such as the revised excise tax law and volatility in crude prices, weighed down San Miguel Brewery, Ginebra San Miguel and Petron Corp. Earnings from affiliates also declined due to higher maintenance costs and other operating expenses incurred by Philippine Airlines and PAL Express.

But the company said that signs of recovery, particularly for San Miguel Brewery Inc. and Petron Corp., have been felt at the start of the second quarter.

Philippine Airlines and PAL Express, where the company has a significant stake, are also looking to trim their losses once new routes are opened and the new aircraft are put into service.

Consolidated cash flow as measured by earnings before interest, taxes, depreciation and amortization (Ebitda) rose by 2 percent year-on-year to P22 billion.

“While we have had mixed results on a per business basis owing to various challenges in the different industries, overall, the company is off to a good start,” said SMC president and chief operating officer Ramon S. Ang. “We will continue to work at managing our capital more efficiently by deploying it in key opportunities consistent with our strategies … and invest in areas that offer the most promise for profitable growth for the larger San Miguel group.”

San Miguel Brewery Inc.’s first quarter consolidated revenues amounted to P17.5 billion, 4 percent lower from last year’s level as new excise tax rates affected volumes, curbing operating income by 9 percent to P4.8 billion.

Ginebra San Miguel was also affected by the increase in excise taxes as anticipation of higher prices in trade channels dampened revenue by 15 percent to P3.1 billion.

Petron’s consolidated net income before minority interest dropped to P2.2 billion from P2.4 billion year-on-year due to the price declines in both crude and finished products during this period.