SMFB plans to conduct follow-on offering

SAN MIGUEL Food and Beverage, Inc. (SMFB) is planning a follow-on offering in a bid to comply with the minimum public ownership rule, after the consolidation of parent San Miguel Corp.’s (SMC) food and beverage units brought down its public float to around four percent.

In a disclosure to the stock exchange on Wednesday, SMFB said its board of directors has approved the offering of 1.2 billion shares owned by SMC, equivalent to around 20% of the company’s outstanding common shares.

Based on SMFB’s closing share price on Wednesday, the offering will allow the company to raise as much as P87.4 billion.

However, it noted the issue price will depend on the terms determined by the management and as agreed upon with SMC.

The listed firm’s board has likewise approved the submission of a registration statement and prospectus for the offer to the Securities and Exchange Commission.

SMC President Ramon S. Ang earlier said the planned share sale would happen in February this year, with the initial size pegged at around $3 billion from the sale of 30% of SMFB’s shareholdings. The company however delayed the issuance due to volatility in the market, pushing it back instead to the fourth quarter.

EARNINGS UP

In a separate statement, SMFB said its earnings jumped by a fifth to P15.4 billion in the first six months of 2018, boosted by the double-digit growth across its portfolio. Consolidated revenues went up 15% to P137.4 billion.

The comparative figures were derived from the consolidated financials of San Miguel Brewery, Inc. (SMB), Ginebra San Miguel, Inc., and San Miguel Pure Foods Company, Inc., following the completion of the businesses’ consolidation last June 29.

The food group generated P62.9 billion in consolidated revenues, 12% higher in the same period a year ago due to the performance of the feeds, poultry and meats, and branded value-added units. Operating income accordingly went up by six percent to P4.7 billion.

SMB benefited from the higher consumption of beer products nationwide, expanding its consolidated revenues by 18% to P62.5 billion for the first semester. The unit delivered P17.3 billion in operating income, 23% higher year-on-year.

Meanwhile, GSMI’s operating income surged by 57% to P862 million during the period, thanks to core brands Ginebra San Miguel and Vino Kulafu. Revenues advanced by 19% to P12 billion.