SMC Brewery to reverse H1 losses

MANILA, Philippines - San Miguel Brewery Hong Kong Ltd., a unit of diversified conglomerate San Miguel Corp., expressed optimism it can recover from losses incurred in the first half of the year through strategic marketing programs.

In a Sept. 22 disclosure, San Miguel Brewery chairman Ramon Ang said the company would continue with its strategies in order to balance beer sales and profitability.

“Overall, the company maintains an optimistic outlook for the rest of the year despite setbacks and challenges encountered in the last year. We are confident that the programs we have in place, together with the commitment of our employees, will continue to bring our brands great success,” Ang said.

He said there is still much that remains to be done to improve the company’s South China operations. 

“A calculated approach of balancing sales and profitability will continue to guide our operations as we move forward,” Ang said.

He said the company maintains an optimistic outlook for the rest of the year despite setbacks and challenges encountered last year. 

The Hong Kong-listed subsidiary earlier reported a consolidated loss of HK$13.9 million during the first half of the year compared to HK$23.1 million profit recorded in the same period last year.

Net loss attributable to equity

shareholders was HK$14.6 million compared to a profit of HK$21.5 million a year ago.

“The Group’s consolidated turnover was at HK$272.3 million, down 23.5 percent from the same period in 2014. Gross profit was HK$111.9 million, with a gross profit margin of 41.1 percent,” it also said.

This followed last year’s expiration and non-renewal of its distribution agreement with Anheuser-Busch, the world’s largest brewer with a 25 percent global market share.

The end of the distribution agreement, announced in October last year, closes more than 15 years of partnership between San Miguel and Anheuser-Busch.

Ang said the company had prepared for the end of the partnership with Anheuser-Busch by developing a new portfolio of premium beer brands through an agreement last year with Spanish brewer Mahou.

“Keeping in line with our key strategy of maintaining a diversified brand portfolio, San Miguel Brewery Hong Kong quickly developed a new portfolio of premium, craft brands. Already, we have made big strides in beefing up our roster of brands. Last February, we entered into a distribution agreement with Mahou S.A. for the exclusive distribution of Mahou Cinco Estrellas,” Ang said.

San Miguel also started selling the following brands: Angry Orchard Cider, Mac’s Great White, Rebel IPA, Samuel Adams Boston Lager, Spitfire Kentish Ale, Whitstable Bay Blonde and Whitstable Bay Pale Ale.

Its own brand, San Miguel Cerveza Negra was well received by the market.

“In the first half of 2015, the brand registered a 72 percent volume improvement over the prior semester,” Ang said.

To promote its flagship San Miguel Pale Pilsen, the Hong Kong listed subsidiary employed television commercials and market-wide promotions, he added.

The company’s two subsidiaries in South China likewise posted significant improvements, ending the first half of the year with a double-digit increase in both consolidated sales volume and net sales revenue.

“We attribute this improvement to a higher average selling prices coupled with effective discount management for Guangzhou San Miguel Brewery Company Limited and the increase in the export business of San Miguel (Guangdong) Brewery Company Limited,” he said.

The Manila-based parent firm San Miguel Brewery, meanwhile, earlier said it posted a net income of P6.9 billion in the first half against the P6.3 billion recorded a year ago.