SMC revenues grow 7% to but income falls 18% to
First quarter performance
Diversified conglomerate San Miguel Corporation (SMC) reported an 18 percent drop in net income to 112.83 billion in the first quarter of 2019 from the 115.61 billion earned in the same period last year.
In a statement, the firm said it posted a 7 percent growth in consolidated revenues to 1250.9 billion on the back of strong volumes across most of its major businesses.
However, its fuels and oils and food businesses were pulled down by volatile global oil prices and higher raw materials cost, respectively.
For its food business, the government’s lifting of special safeguard duties against import surges led to an industry-wide oversupply and a significant decline in poultry prices.
The rising cost of major raw materials — wheat, soybean meal, corn, and cassavawas also a big factor.
This resulted in an 99 percent fall in net income of San Miguel Pure Foods to 111 million from 11.36 billion in the first quarter last year.
Petron Corporation, on the other hand, lost 5 percent volume for its Philippine operations following the imposition of higher excise taxes. The volatility in global crude prices also eroded refining margins by almost 13.3 billion in the first quarter.
“The slowdown in these businesses is temporary. We are not taking them lightly and we’re seeing clear signs of recovery,” SMC president and COO Ramon S. Ang said.
He noted that, “we anticipate higher consumer spending from an improving economy, primarily the easing of inflation. The election season also usually brings us good results. We’ve implemented a good number of measures
to recover lost ground and further strengthen our competitive positions in industries where we are in.”
“We’re off to a good start in terms of our volume and revenue performance. Our businesses are performing strongly despite the challenges, and we are confident that as it was in the past, we will overcome the impact of these economic challenges faced,” added Ang.
San Miguel Food and Beverage, Inc. posted consolidated revenues of 175.7 billion, 14% higher than the same period in 2018, propelled by higher volumes