San Miguel Food & Beverage net income hits P30.5 billion

SAN MIGUEL Food and Beverage, Inc. (SMFB) increased its net income by eight percent to P30.5 billion in 2018, following a double-digit growth in revenues across all its business units.

The listed food and beverage firm in a statement Wednesday said its earnings got a lift from the 14% growth in consolidated sales to P286.4 billion. Its units include San Miguel Pure Foods (SMPF), San Miguel Brewery, Inc. (SMB), and Ginebra San Miguel, Inc. (GSMI).

“Despite the high inflationary environment in the past year, we are pleased with the performance of our food and beverage businesses, which all delivered strong revenue growth. This is proof that our brands continue to resonate strongly with consumers,” SMFB President and Chief Executive Officer Ramon S. Ang said in a statement.

SMPF’s consolidated sales rose 13% to P132.3 billion, as its brands Magnolia, Purefoods, Tender Juicy, B-MEG, Dari Creme, Star, and La Pacita performed well. The unit, however, noted that the rising costs of raw materials, start-up costs from expansion projects, and the decline in poultry prices affected its net income for the year.

For SMB, consolidated revenues reached P129.2 billion, 14% higher year on year, on the back of higher consumption of its leading brands Red Horse and San Miguel Pale Pilsen.

Meanwhile, GSMI increased its revenues by 19% to P24.8 billion following strong volume growth from the Ginebra San Miguel brand.

“Moving forward, we will continue to invest in our businesses to meet the demands of growing consumption in the Philippines, and ensure that our quality products are always accessible to our consumers. We are confident that this will lead to more sustainable earnings growth and value,” Mr. Ang said.

This is the first time that SMFB has announced its full-year earnings results as a consolidated firm. The company was previously called San Miguel Pure Foods, Inc., before management decided to merge the firm with GSMI and SMB through a P336-billion share swap transaction.

SMFB then conducted a follow-on offering in November to increase its public float, as the merger pulled down public ownership to 4.12% — way below the 10% minimum requirement set by the Securities and Exchange Commission.

The company raised P34.1 billion from the sale of 400.9 million shares at P85 each, which will be used for the construction of 10 breweries in the country, as well as other expansion efforts of other units.

Shares in SMFB dropped 1.47% or P1.60 to close at P107.40 each at the stock exchange on Wednesday. —