San Miguel profit surges by 67% to P45 billion

ANG-LED conglomerate San Miguel Corp. (SMC) recorded a 67% jump in its net income for 2023, reaching P44.7 billion, driven by growth across its business segments.

The conglomerate’s earnings before interest, taxes, depreciation, and amortization (EBITDA) last year rose by 24% to P205.3 billion, while consolidated operating income improved by 34% to P144.5 billion, SMC said in a statement on Thursday.

SMC attributed the results to volume growth across its key businesses, including San Miguel Brewery, Inc., Ginebra San Miguel, Inc., Petron, and SMC Infrastructure, along with the integration of Eagle Cement Corp.’s financial results.

“We had a strong finish to 2023, which was marked by a healthy operating income and EBITDA, thanks to our continuous efforts to maximize operational efficiencies, aligned with our sustainability agenda,” SMC President and Chief Executive Officer Ramon S. Ang said.

“Our robust performance again reflects our resilience and ability to deliver a strong bottom line despite macroeconomic uncertainties, and our commitment to continue investing on nationbuilding projects,” he added.

SMC’s food and beverage business led by San Miguel Food and Beverage, Inc. (SMFB) saw a 10% jump in net income to P38.1 billion as revenues improved by 6% to P379.8 billion. The growth was due to better volumes and pricing strategies, the company said.

San Miguel Brewery, Inc. recorded a 16% increase in its 2023 net income to P25.3 billion as consolidated sales climbed by 8% to P147.3 billion.

Net income of Ginebra San Miguel, Inc. increased by 55% to P7 billion in 2023, while its EBITDA surged by 41% to P9.4 billion. Its revenues rose by 13% to P53.6 billion.

The conglomerate’s food group recorded a 2% jump in revenues to P178.8 billion due to “strategic pricing across segments, complemented by aggressive marketing to stimulate demand.”

“Strong fourth-quarter operating income growth of 89% cushioned a full-year decline at 23%, to end at P10.2 billion,” SMC said.

Net income of San Miguel Global Power tripled to P9.9 billion in 2023 from P3.1 billion in 2022 due to better operating margins and foreign exchange gains. Revenues fell 23% to P169.6 billion on lower contracted volumes and prices due to reduced fuel tariffs.

“Newcastle coal indices averaged $172.79 per metric tons (MT) in 2023, compared to $360.19/MT in 2022,” SMC said.

“Notably, the fourth quarter saw a 32% increase in volumes from the year-earlier period — a turnaround from the declines in the first three quarters of the year, partly due to higher sales volume from the San Roque hydropower plant, and increased contributions from its battery energy storage system network,” it added.

Petron Corp. saw a 10% jump in its 2023 net income to P10.1 billion. Its sales volume increased by 13% to 126.9 million barrels led by wide presence and effective volume-generation strategies both in the Philippines and Malaysia.

However, Petron’s revenues dropped by 7% to P801 billion as prices continued to correct from record-high levels in 2022.

SMC Infrastructure recorded a 33% improvement in its 2023 net income to P11.4 billion. Consolidated revenues grew by 17% to P34 billion due to sustained growth across all operating toll roads.

“Combined average daily traffic volume reached 1 million vehicles, an 8% increase from 2022 level, buoyed by continued increase in travel activities,” SMC said.

SMC’s cement business consisting of Eagle Cement Corp., Northern Cement Corp., and Southern Concrete Industries, Inc. saw a fourfold growth in consolidated revenues to P37.2 billion in 2023 due to the full-year consolidation of Eagle Cement in 2023, and the start of commercial operations of a new facility in Davao del Sur.

SMC is confident that it would “efficiently manage its business and continue to deliver sustainable value” amid market uncertainties.

The conglomerate is expecting its food and beverage business to see sustained growth led by positive consumer demand backdrop, favorable inflationary environment, and strong brand following.

SMC’s Infrastructure business is forecasted to sustain its growth trajectory with continued traffic growth across its network, as well as increased travel nationwide.

With its increased capacity, the conglomerate said its cement business is seen to benefit from both private and public sectors’ push for economic and infrastructure development.

“SMC is optimistic that the country’s robust macroeconomic fundamentals and its strategy, anchored on our sustainability agenda, will sustain growth momentum throughout 2024,” it said.

On Thursday, SMC shares dropped by 0.39% or 40 centavos to P101.10 apiece. —