San Miguel profit up 57% to P27.6 B

MANILA, Philippines - Diversified conglomerate San Miguel Corp. (SMC) posted hefty gains in profits last year, reversing the decline in earnings recorded a year earlier.

The performance of core businesses improved while new units provided additional income streams, its top executive said.

Net income surged 57 percent to P27.6 billion last year, SMC said in a disclosure. In 2011, its profits sank 13 percent to P17.5 billion in the absence of non-recurring gains.

Consolidated net income before minority interest jumped 35 percent to P38.6 billion on higher gains from the other investments and favorable foreign exchange rates, it added.

“Our performance over the last 12 months points to the strategic value of our growing portfolio,” said SMC president and chief operating officer Ramon S. Ang.

He said it is also a result of synergies among the conglomerate’s subsidiaries.

Consolidated sales revenues gained 30 percent to P699 billion while consolidated operating income slipped six percent to P52.8 billion “due to volatility of crude prices and higher raw material costs in its food business.”

“Despite the many challenges of the previous year, our core businesses continued to show marked and sustained improvement, while our new businesses, as intended, have added scale, stability, and robust revenue streams,” Ang said.

Revenues from its new businesses like power (SMC Global Power Corp.) and oil refinery and distribution (Petron Corp.) picked up 46 percent last year, accounting for more than 70 percent of total revenues, SMC said.

SMC’s core beverage, food, and packaging businesses grew four percent last year.

Consolidated revenues of San Miguel Brewery Inc. rose five percent to P75.6 billion due to higher selling prices and a slight growth in sales volume at 224.8 million cases.

Liquor unit Ginebra San Miguel Inc. was able to cut its operating loss by a third to P566 million despite net sales falling four percent to P14.55 billion.

San Miguel Pure Foods Co. Inc.’s net income attributable to the equityholders of the parent company gained three percent to P4.23 billion last year.

SMC said it benefited from higher demand, the successful launch of new products and the continued expansion of its distribution network, allowing sales revenues to grow seven percent to P95.8 billion.

San Miguel Yamamura Packaging Corp.’s operating income gained six percent to P2.3 billion, “owing to improvements in efficiencies and cost structure,” SMC said.

For the fuels business, Petron posted a 55-percent uptick in revenues to P425 billion given the consolidation of its Malaysian operations that contributed P142 billion in revenues.

“Revenues from local operations also rose three percent due to increased volumes and favorable selling prices,” Petron said.

However income from operations plunged 38 percent to P9.39 billion “due to volatility and significant price swings in both crude oil and petroleum product prices,” Petron said. Its net income sank 73 percent to P2.3 billion.

Power producer SMC Global grew its operating income two percent to P17.12 billion.

Revenues rose four percent to P74.7 billion as its Sual, Ilijan and San Roque power plants generated a total of 15,250 gigawatt-hours, up six percent from a year ago.

SMC said capacity utilization of its power plants improved to 71 percent from 67 percent in 2011 due to higher bilateral requirements despite various forced outages.

In another disclosure, SMC said its board of directors approved the participation of the conglomerate in the Mactan Cebu Airport Project bidding through its subsidiary.

SMC is undergoing a five-year, $34.83-billion investment plan that will make it the largest investor in the Philippines. The conglomerate said it will spend an average of P283.52 billion every year until 2017.