San Miguel incurs P4-B net loss as Petron becomes unprofitable

SAN MIGUEL CORP. (SMC) booked a P4-billion net loss in the six months to June, as its fuel unit became unprofitable during the coronavirus-related quarantine.

In an investor presentation posted on its website on Thursday, SMC said the coronavirus pandemic made it bleed in the first semester, reversing its net income of P26.15 billion in the same period last year.

Consolidated revenues dropped 31% to P352.8 billion, as income from operations contracted 74% to P14.93 billion.

By business segment, SMC’s fuel unit Petron Corp. and beer unit San Miguel Brewery, Inc. (SMB) were the main drag of the decline.

Petron posted a net loss of P14.2 billion, a turnaround from its net income of P2.6 billion last year. Consolidated revenues slumped 40% to P152.4 billion.

It attributed the reversal to the volatility of global crude prices, and the eventual imposition of a lockdown in March which restricted nonessential travel.

SMB also suffered from the lockdown, as the government imposed a liquor ban to match the measure, thus pulling down the company’s revenues by 39% to P42.8 billion.

It also started seeing the effects of the higher excise tax on sin products, as it recorded a 62% profit drop to P5.02 billion.

But the 28% net growth of the spirits business to P1.26 billion, and the profit jump of the foods business to P1.34 billion from last year’s P447 million, tempered the decline in the consolidated net income of San Miguel Food and Beverage, Inc. to a 19% drop to P122.82 billion.

“The first half was particularly challenging for most in the business sector but we are seeing strong indications of a recovery for SMC businesses, and we remain focused and determined to build on these gains,” SMC President and Chief Operating Officer Ramon S. Ang said in a statement.

“Government reopening the economy, and allowing businesses to operate under strict health and safety protocols, was a very good call,” he added.

SMC ended the semester with its cash growing to P344 billion from P286 billion in end-2019. Its interest-bearing debt also grew to P953 billion from P852 billion. The company’s net debt-to-total equity stood at 0.93x.

Shares in SMC at the stock exchange increased 30 centavos or 0.31% to P97.30 each on Thursday. —