Philippines: San Miguel sustains robust pace in 1st half 2007

San Miguel Corp. 1st half net income rises 81% to P7.88 billion, according to company’s press release, August 9.

Consolidated sales revenue reached P112.7 billion, 9% above the same period last year. While beer domestic and food businesses improved operating income by 21% and 10%, respectively, consolidated operating income declined to P8.20 billion. This is due to the increased costs of National Foods’ operations – a direct result of the prolonged drought in Australia. Beer international gained in the second quarter but San Miguel’s packaging and liquor subsidiaries, although improving, are still behind last year.
Consolidated net financing charges fell 44% to P2.23 billion, aided by the continuing strength of the peso. Other income, representing gains on the sale of Del Monte shares and gains from discontinued operations, pushed consolidated net income to P7.88 billion.

San Miguel’s domestic beer operations recorded 3% higher volumes, courtesy of a robust second quarter delivering for the business, 6% higher revenue at P21.2 billion. Operating income grew by 21% to P5.7 billion on account of stronger volumes and contained fixed operating expenses.

Overseas, San Miguel Brewing Int’l, Ltd. (SMBIL) ended the first semester with encouraging results. The second quarter’s operating income significantly narrowed the 1st quarter’s loss from considerable gains in North China, Australia and Export operations offsetting the lower sales in Indonesia and South China.

Ginebra San Miguel, Inc. ended the first half with 6% higher volumes, fueled by domestic liquor sales and exports. Revenue hit P6.32 billion – 3% higher than last year driven by Ginebra San Miguel Bilog’s resurgence and GSM Blue’s strong performance. Despite an improved sales mix, operating income nevertheless declined to P382 million as high input costs and the absorption of the 8% excise tax offset gains in volume.

The San Miguel Food Group brought in P31.7 billion in revenue for the first six months of 2007 – up 5% year-on-year due to higher volumes across all businesses and improved selling prices, particularly in the second quarter. Operating income rose 10% to P1.18 billion as a result of significant cost improvements in dairy, processed meats, and food service operations.

Meanwhile, the Packaging Group’s revenue fell 9% to P9.29 billion. Operating income likewise declined to P157 million as over-all demand remained sluggish. Significant sales improvements in the glass, plastics and metal segments nonetheless were recorded in the second quarter, which are expected to be sustained for the rest of year.

National Foods’ first semester revenue reached AUD 967.6 million, 10% above last year despite the prevailing drought condition across the continent. Higher costs of imported juice concentrates amid tight fruit supply however dragged operating income down to AUD 40.8 million.

10 August, 2007