SMC posts P1.1-B net income in Q1

Food and beverage conglomerate San Miguel Corp. earned P1.11 billion in the first quarter of this year, about three percent less than the same period a year ago due to the short-term effect of its major corporate acquisitions, the company said in a statement.

From a P1.167-billion net income last year, SMC’s profit this year was pulled down by the repurchase of big-ticket items Coca-Cola Bottlers Philippines Inc. (CCBPI) in early 2001, Pure Foods Corp. (now San Miguel Purefoods Inc.) in May and Cosmos Bottling Corp. (CBC) in the latter part of 2001.

Without the acquisitions, SMC said its consolidated net income would have been 13 percent better during the first quarter.

But with these new additions, consolidated revenues grew by 35 percent from P22.39 billion to P30.17 billion this year. The sales growth was primarily driven by the food business (86 percent), beverage (41 percent) and packaging (three percent).

For the full year 2001, SMC’s profit was trimmed down by four percent to P6.5 billion but consolidated revenues were boosted by 48 percent. SMC broke the P100-billion sales mark last year as consolidated revenues amounted to P121.6 billion, a huge 48-percent improvement from a year earlier as the annexing of market leaders Purefoods and CCBPI increased sales output by 90 percent and 48 percent for food and beverage, respectively.

SMC said in the first three months, interest expenses declined by 29 percent as the company pre-paid some of its loans, resulting in a three-percent decrease in net financing charges. Interest income, however, was lower as placements went down due to the acquisitions, but this was slightly offset later in the quarter by the entry of P28-billion equity infusion from Japan’s Kirin Brewery Ltd., which acquired a 15-percent stake in SMC.

Meanwhile, the SMC board of directors approved a 50-percent increase in the company’s regular cash dividend pay-out to its almost 50,000 shareholders. The increase will be over a period of five years, beginning 2001.

The company has paid out a total of over P2.25 billion in cash dividends during the year 2000 and P1.8 billion in 2001, excluding the fourth quarter provision.

SMC also announced that in line with its commitment to good corporate governance, transparency, full management accountability and protection of minority shareholders’ interest, the board approved the appointment of three non-executive directors to chair select committees.

They are Corazon de la Paz, president and CEO of the Social Security System, for the audit committee; Juan Santos, former chairman and CEO of Nestle Philippines, for the executive compensation committee; and SMC legal counsel Estelito Mendoza, for the nominations committee, Eduardo Cojuangco Jr. SMC chairman and CEO, will continue to head the executive committee. – Conrado Diaz Jr.