SMC reports flat earnings as fuel, food units slip

SAN MIGUEL CORP. (SMC) posted flat earnings in 2019, dragged by a decline in earnings from its oil and food businesses.

In a presentation to investors yesterday, the listed conglomerate said net income last year was steady as sales ended flat at P1.02 trillion.

Consolidated operating income dipped 1% to P115.72 billion, which it traced to lower returns from Petron Corp. and San Miguel Foods.

Petron posted a 67% drop in net income last year to P2.3 billion, as sales likewise fell 8% to P514.36 billion. This was driven by cheaper average selling prices, lower consolidated volumes, an oversupply situation and a temporary shutdown of one of its refineries.

“Petron faced many challenges throughout the year: volatile international prices that resulted to significantly weaker margins, a major shutdown of its Bataan Refinery due to an earthquake, the implementation of the second tranche of the excise tax increase, and the continued proliferation of white stations,” SMC said in a statement.

San Miguel Foods, a division of listed San Miguel Food and Beverage, Inc. (SMFB), also saw a 41% decline in net income to P3.45 billion despite a 5% growth in net sales to P139.46 billion. SMC attributed it to the lower poultry prices in the first half of 2019, the spread of the African Swine Flu and expenses from opening new facilities.

But SMFB closed with a 6% rise in net income to P32.28 billion, lifted by the improved performance of its beer and spirits businesses, which climbed 6% and 14%, respectively. Consolidated revenues also grew 9% to P310.79 billion.

SMC’s power business, through SMC Global Power Holdings Corp., saw a 73% jump in net income to P14.36 billion. Sales likewise increased 12% to P135.06 billion.

“(SMC Global Power) ended the year with consolidated off-take volume of 28,112 gigawatt hour, 18% higher than in the same period last year. This was the result of higher bilateral sales volumes and longer operating hours for the Sual and Ilijan power plants,” the company said.

“The full year operation of Unit 2 of the Malita, Davao plant and Unit 3 of the Limay plant, along with added capacity from Unit 4 of Limay, also boosted the power unit’s performance,” it added.

SMC Infrastructure, which operates toll roads across the country, added P23.41 billion in sales in 2019, down 5% year on year.

Shares in SMC at the stock exchange shed P9.50 or 7.95% to close P110 each yesterday. —