San Miguel Food & Beverage nets P32.28B

San Miguel Brewery has been producing beer for the last 126 years

Consumer giant San Miguel Food and Beverage Inc. (SMFB) chalked up a consolidated net income of P32.28 billion last year, up by 6 percent, as higher earnings from its beer businesses made up for the challenging food business.

The reported net profit included earnings attributable to minority interest.

Group-wide revenues went up by 9 percent to P310.79 billion in 2019, attributed to higher volumes and average selling prices across key products, SMFB disclosed to the Philippine Stock Exchange on Thursday.

Consolidated operating income increased by 4 percent to P47.78 billion. The beer business continued to drive results as revenues grew by 10 percent to P142.27 billion due to higher domestic beer volumes.

The beverage business offset the slowdown in the food business due to the effect of lower poultry prices during the first half of the year, the impact of African Swine Flu on hogs costs, and start-up expenses for new facilities. 

But the food division grew revenues by 5 percent to P139.46 billion, as the poultry industry continued its recovery towards the second half of 2019.

SMFB reported strong consumer demand for its prepared and packaged food segment, driven by core products such as Tender Juicy Hotdogs, Purefoods Chicken Nuggets, Purefoods Corned Beef, Magnolia Gold Butter and Star Margarine.

Product mix likewise improved as SMFB shifted its portfolio to higher-margin products.

In response to the African swine fever, SMFB converted some of its pork-based products to chicken-based formulations.

Meanwhile, the spirits and liquor business grew revenues by 17 percent to P29.06 billion. Volumes roe by 14 percent compared to the previous year, which the group attributed to thematic campaigns “Pilipino Ako, Ginebra Ako” for Ginebra San Miguel and “I Choose Mojito” for GSM Blue, supplemented by trade promotions and on-the-ground activities for its consumers.

“We continue to remain confident in the strength of the Philippine consumer and resilience of the economy. We believe we have the ability to overcome the challenges we now face as we continue to expand the breadth of our product offerings and reinforce our presence in markets. We remain focused on delivering the best products, and providing improved results to all our stakeholders,” SMFB president and chief executive officer Ramon S. Ang.