By James A. Loyola
Diversified conglomerate San Miguel Corporation (SMC) reported an 18 percent drop in net income to P12.83 billion in the first quarter of 2019 from the P15.61 billion earned in the same period last year.
In a statement, the firm said it posted a 7 percent growth in consolidated revenues to P250.9 billion on the back of strong volumes across most of its major businesses.
However, its fuels and oils and food businesses were pulled down by volatile global oil prices and higher raw materials cost, respectively.
For its food business, the government’s lifting of special safeguard duties against import surges led to an industry-wide oversupply and a significant decline in poultry prices.
The rising cost of major raw materials — wheat, soybean meal, corn, and cassava- was also a big factor.
This resulted in an 99 percent fall in net income of San Miguel Pure Foods to P11 million from P1.36 billion in the first quarter last year.
Petron Corporation, on the other hand, lost 5 percent volume for its Philippine operations following the imposition of higher excise taxes. The volatility in global crude prices also eroded refining margins by almost P3.3 billion in the first quarter.
“The slowdown in these businesses is temporary. We are not taking them lightly and we’re seeing clear signs of recovery,” SMC president and COO Ramon S. Ang said.
He noted that, “we anticipate higher consumer spending from an improving economy, primarily the easing of inflation. The election season also usually brings us good results. We’ve implemented a good number of measures to recover lost ground and further strengthen our competitive positions in industries where we are in.”
“We’re off to a good start in terms of our volume and revenue performance. Our businesses are performing strongly despite the challenges, and we are confident that as it was in the past, we will overcome the impact of these economic challenges faced,” added Ang.
San Miguel Food and Beverage, Inc. posted consolidated revenues of P75.7 billion, 14% higher than the same period in 2018, propelled by higher volumes and revenues across the Beer, Spirits, and Food businesses. Net income grew 1 percent to P7.4 billion.
SMC Global Power Holdings Corp. posted a 166 percent jump in net income to P3.58 billion from P1.35 billion on consolidated off-take volume growth of 42 percent to 6,826 Gwh in the first three months.
Petron Corporation’s net income dropped 77 percent to P1.3 billion while SMC Infrastructure’s profit was steady at P3.13 billion.