Happy hour, happy quarter: SMC business picks up after lockdown easing
Conglomerate San Miguel Corp. (SMC) chalked up a P15-billion net profit in the third quarter, reversing the P4-billion net loss in the second semester when lockdown protocols bludgeoned most of its businesses.
SMC’s third quarter net profit marked a 10.7-percent improvement from the earnings in the same period last year as the reopening of the economy revitalized its beer, petroleum and energy businesses. This brought the nine-month net profit to P10.7 billion, still down by 73 percent year-on-year due to the weak results in the first semester.
“The country has proven its adaptability and resilience in these trying times, and we, in [SMC], will continue to deliver on our commitment to help the country build back better and stronger as we emerge from this pandemic,” SMC president Ramon S. Ang said.
Consolidated revenues and operating income of P531.1 billion and P41.5 billion for the nine-month period remained lower at 30 percent and 53 percent, respectively.
The firm’s combined food, liquor, beer and beverage unit, San Miguel Food and Beverage Inc. (SMFB) also reported a rebound in third quarter net profit from the year’s low in the second quarter as the reopening of the economy dramatically improved beer sales.
SMFB’s net income for the third quarter stood at around P7.02 billion, accounting for nearly half of the nine-month net profit (including earnings attributable to minority interest) of P14.36 billion.
While the third quarter earnings went down by 14.9 percent year-on-year, this marked a 365-percent rebound from the meager profit of P1.51 billion seen in the second quarter, or when the toughest lockdown protocols were in place.
Due to these same limitations, nine-month earnings saw a 37-percent year-on-year decline.
Of the third quarter numbers, Ang said: “This is an encouraging development that proves we are on track to recovery. We came out of the quarter confident in the resilience of our businesses and determined to deliver on our commitment to continue helping fight the pandemic and the country heal.”
The company’s consolidated revenues dropped by 14 percent year-on-year to P194.56 billion at end-September.
Lockdown restrictions started to ease in June, except when the government had to revert back to a stricter modified enhanced community quarantine for two weeks in August. This helped improve mobility and consumer confidence.
The lifting of accompanying liquor bans also translated to better sales and volume performance for SMFB’s beer and spirits products.
In particular, San Miguel Brewery Inc.’s (SMB) volumes improved significantly in the third quarter at 54 million cases versus the second quarter with 26.4 million cases—albeit still lower than the 2019 quarterly average, as some watering holes remained closed.
SMB posted a nine-month net profit of P11.08 billion out of consolidated revenues of P72.48 billion.
International operations of SMB in the third quarter also benefited from the easing of restrictions in markets where it operates, such as Hong Kong and Vietnam.
Ginebra San Miguel Inc. (GSMI) also delivered strong volume in the third quarter that pushed up nine-month volumes by 33 percent from the same period last year. As a result, GSMI’s consolidated revenues for the nine-month period grew by 18 percent year-on-year to P25.34 billion.
As consumers settled into their home-based lifestyles, packaged food became essential items in their grocery baskets, benefiting SMFB’s processed food segment.
San Miguel Foods registered nine-month consolidated revenues of P96.74 billion, resulting in a consolidated net income of P1.55 billion.
