SMC’s Q1 profit down 91%
Conglomerate San Miguel Corp. saw a 91 percent year-on-year drop in first quarter net profit to P1.09 billion as the lockdown measures required to curb the coronavirus (COVID-19) pandemic affected its beer, oil, infrastructure and energy businesses.
The net profit level includes earnings attributable to minority interest.
“This is an unprecedented crisis we are in, and many countries all over the world continue to struggle to cope. Like most big and small businesses in the Philippines, we are also affected but we maintained our focus on cost reduction and cash preservation amid the COVID-19 crisis,” SMC president Ramon S. Ang said in a disclosure to the Philippine Stock Exchange.
“Right now, our priority is really to ensure the continuous and efficient delivery of our products and services for the people, strengthen and expand new programs we’ve initiated during this crisis that have worked for us, implement our plan to safely bring our workforce back, and continue to help the country manage the impact of this pandemic. Our economy and day-to-day lives depends on how well we can all work together as one nation to fight COVID-19,” Ang added.
Consolidated first quarter revenues declined by 15 percent to P214 billion while cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) stood at P27 billion, 34 percent lower year-on-year. SMC’s consolidated net sales fell by 62 percent while income from operations declined by 62 percent year-on-year to P11.73 billion.
The conglomerate started first two months of 2020 well, generating revenues of P160.5 billion and consolidated EBITDA that was broadly in line with previous year at P21.3 billion.
In March, however, the enhanced community quarantine necessitated a total liquor ban, the suspension of public transportation, as well as stay-at-home-orders and local lockdowns that stopped virtually all vehicle movement except for essential travel and the closure of many companies which reduced power demand by as much as 40 percent.
Beer and spirits sales also slowed down as a result of the liquor ban implemented by local government units in Metro Manila and key cities in Luzon. This was partly offset by higher sales from the food division, particularly the prepared and packaged food segment.
Oil refining unit Petron incurred a net loss of P4.9 billion, compared to the net income of P1.3 billion in the previous year. This was due largely to significant inventory losses resulting from the collapse of crude oil prices.
SMC Infrastructure’s operating toll roads registered a 15 percent volume decline, as the ECQ restricted travel movements throughout Luzon. Consolidated revenues fell by 27 percent to P4.7 billion, while operating income stood at P1.8 billion.
