SMC earnings drop by 33% in H1

San Miguel Corp. reported a net income of P19.8 billion in the first half of the year, down 33 percent from P29.6 billion a year earlier.

Consolidated sales revenues, however, grew 73 percent to P711.4 billion from P410.1 billion the previous year.

The P19.8 billion net profit was affected by the forex movements and was due to the impact of the CREATE Law, SMC said.

Without the impact of forex and the CREATE Law, net income would have grown 24 percent to P32.5 billion during the period from P26 billion a year ago.

Operating income grew by 41 percent to P85.9 billion mainly due to the improved performance of its fuel and oil subsidiary Petron and sustained recoveries of its food, beverage, packaging, and infrastructure businesses. EBITDA reached P91.2 billion, up 13 percent.

SMC said “the strong financial performance for the first half of 2022 was driven by top-line gains across its businesses,” amid the lingering effects of the pandemic, supply chain bottlenecks and inflationary pressures.

SMC president and CEO Ramon Ang said it’s been a very challenging time with geopolitical conflict resulting in uncertainties and serious supply and cost issues that are affecting industries all over the world.

“Despite this, and even with the lingering effects of the pandemic, we’re encouraged by the strong and increasing demand for our products and services, as evidenced by our higher volumes and revenues in the first half. This shows that our country’s economic recovery and growth are gaining pace. We will maximize every opportunity to further strengthen our performance in the second half,” Ang said.

In terms of subsidiaries, San Miguel Food and Beverage Inc. (SMFB) posted consolidated revenues of P172 billion in the first half, a 17 percent increase over the same period last year, driven by volume growth and better selling prices across the beer, spirits, and food divisions.

SMC Global Power Holdings Corp., incurred a net loss of P1.8 billion during the period, reversing the P12.2 billion profit recorded a year ago. This was despite a 70 percent hike in net sales to P102.6 billion.

Petron Corp., meanwhile, delivered a strong performance in the first-half with consolidated revenues surging 129 percent to P398.5 billion.

Consolidated volumes from its Philippine and Malaysia operations grew 34 percent to 51.4 million barrels on the back of demand recovery due to sustained easing of travel restrictions and the improved pandemic situation.

With improvements in refining margins, consolidated operating income increased by 79 percent to P16 billion, with net income doubling to P7.7 billion from P3.87 last years – already surpassing the full-year 2021 level.

Revenues of the company’s infrastructure arm grew 58 percent to P13.4 billion for the period in review. Its operating income soared by 160 percent to P6.0 billion amid higher traffic volume.