SBS profit surges on asset sale
SBS Philippines Corporation, one of the country’s leading chemical distribution firms, saw a dramatic 1,156 percent increase in its net income for the first half of 2016 to R910.7 million from R72.5 million in the same period last year.
In a disclosure to the Philippine Stock Exchange, the firm said the profit surge came from a significant one-off gain from the disposal of its real estate investments amounting to R826.3 million.
Excluding the one-time gain, net income grew 16.41 percent to R84.4 million in the first half of the year.
SBS said it posted a 12.8 percent sales growth in the first half of 2016 to R517.1 million from R458.6 million in the comparable period last year.
It said the strong sales performance reflected the notable volume growth in cosmetics and pharmaceutical raw materials, feeds, and industrial chemical segments as SBS delivered on its strategy to increase market penetration and grow its business volumes through increased sales activities in these segments.
“Food ingredients continue to account for the bulk of our sales at 35 percent, followed by industrial at 32 percent, feeds at 22 percent, and raw materials for pharmaceuticals and cosmetics contributing at 11 percent,” said SBS.
It said these reflect the execution of the strategy to improve product mix for a more comprehensive industry coverage.
“The robust growth in the Philippine economy and the greater reliance of chemical manufacturers on third party distribution channels to access local customers continue to support our double-digit growth momentum for the year,” said SBS President Gerry D. Tan.
Substantial increase in earnings of core business was posted by the Company in the first six months of 2016, reflecting a growth of 18.9 percent in operating profit year-onyear.
Operating profit reached R113.0 million for the first half of 2016, backed by organic revenue growth, significant drop in finance charges on account of substantial debt pay downs, lowered operating expenses and increases in income contributions from noncore assets.
Net debt was further cut down to R373.7 million during the first half of 2016 from R1.6 billion of the prior comparable period as the excess cash was used to reduce debt consist- ing mainly of short-term liabilities while the Company evaluates its investment options in line with the Company’s growth strategy.
“We have significantly strengthened our balance sheet and built on our financial strength in order reap the maximum benefit of the sales opportunities presented by the continuously improving economic prospects. SBS remains totally focused to grow in value and will leverage its assets, prospects and organization to deliver this,” said SBS Chairman Necisto U. Sytengco.