SMC earnings down 5% to P39.7 Billion

MANILA, Philippines — San Miguel Corp. (SMC) reported a five percent drop in its nine-month net income to P39.7 billion, weighed down by lower earnings from Petron Corp. and a decline in the food business.

SMC’s net sales reached P758.6 billion, slightly down from a year ago.

In a separate statement, SMC said Petron continues to be weighed down by volatile global crude oil prices and weak refining margins, while San Miguel Foods faced headwinds from rising raw material costs. 

Petron’s consolidated revenues fell nine percent to P381.7 billion as the company continued to reel from volatile movements in global crude oil prices, weak refining margins, and a slowdown in demand.

This was, however, partially mitigated by volume increases in Petron’s Malaysia operations.

SMC president and chief operating officer Ramon Ang said smuggling persists and has become a major drag to Petron’s earnings.

“We will continue to push for a level playing field in the industry where illicit trade persists. This level-playing field is what we hope will prevail throughout the country. We support government’s fuel-marking program and look forward to its implementation for all players,”Ang said.

“Oil smuggling robs government of much-needed taxes, and deprives consumers of quality fuel, which are not allowed to thrive,”he added.

SMC’s food and beverage business San Miguel Food and Beverage Inc. posted consolidated revenue of P226.4 billion, driven by strong growth across the business segments, wherein beer grew 11 percent, spirits 20 percent, and food six percent.

This brought consolidated operating income to P33.6 billion due to price and raw material cost pressures faced by its food business.

Net income of food alone slipped 59 percent to P1.8 billion.

But Ang said the continuous recovery seen in the poultry business during the third quarter in particular, along the steady growth of the beverage business, have been very encouraging.

For power, SMC Global Power Holdings Corp. posted consolidated off-take volume of 21,581 gwh during the nine-month period, 22 percent higher than in the same period last year. This was the result of higher bilateral sales volumes and improved operations at the Sual, Ilijan, and San Roque power plants, and the full nine-month operation of the Masinloc power plant. 

As a result, net income more than doubled to P11.4 billion.  Revenues grew 18 percent to P105.1 billion.

SMC Infrastructure’s operating toll roads, meanwhile, reported a combined six percent growth in vehicular traffic volume compared to the same period last year. Revenue reached P17.8 billion, while operating income amounted to P9 billion.

Last Sept. 18, SMC, through SMC Infrastructure, signed the concession agreement for the proposed Manila International Airport project. The company was also given the notice to proceed.

“This new airport will be our single-largest investment in the country. It will be sustainably-master-planned and will be a ‘game-changer’for the Philippine economy,”Ang said.