By JAMES A. LOYOLA
Food and beverage conglomerate San Miguel Corporation (SMC) sustained its strong performance in the first semester of the year with consolidated net income reaching R4.0 billion, up 31 percent versus last year.
The firm said in a disclosure to the Philippine Stock Exchange (PSE) yesterday that this increase is an improvement from the 30 percent growth in the first quarter. The second quarter benefitted from the higher consumer spending brought about by the extended election campaign.
SMC said higher earnings were achieved on corporate volume growth todate of six percent over last year and consolidated sales revenue of R81.28 billion, 13 percent higher than last year.
First half consolidated operating income amounted to R8.11 billion, a 32 percent increase over last year. The improvement largely resulted from higher beer volumes, the fixed cost containment of the Coca-Cola Beverage Group, significant improvements of the food group and the recovery of SMC’s beer international operations.
Domestic beer’s year-todate operating income rose 25 percent to R4.0 billion while total revenue registered a 22 percent increase to R18.3 billion on a beer volume growth of 19 percent over last year.
Meanwhile, international beer sales volume went up 17 percent for the first semester with sales revenue reaching $120.1 million.
Substantial progress has also been achieved in SMC’s regional expansion program with successive groundbreaking activities for new facilities in Thailand, Indonesia and Vietnam, reflecting the Company’s confidence that it has the products and brands that will appeal to a variety of regional tastes.
SMC said earlier that its international beer operations are expected to report solid volume gains in the first half of the year amounting to the highteens.
In terms of revenues, the company expects to grow more than 20 percent and report a positive operating income figure.
Encouraged by the very positive outcome in the first semester, SMC anticipates the momentum to continue in the second half of the year.
"Sales are expected to further increase in the summer months and the same strong results are expected in China," an SMC official noted, adding that the Greater China operations account for more than two-thirds of SMC’s international beer volumes.
"We anticipate China to register volume growth in excess of 20 percent for the first six months of 2004," the official said. Profit performance for the period is expected to show a significant improvement from last year as operations recover from the SARS-stricken days of 2003.
Outside China, Australia and Indonesia are the two markets that performed extremely well. Volumes increased significantly, and contributed to the company’s positive results.
Analysts believe that San Miguel’s penetration of regional growth economies, such as Thailand and Vietnam, was "strategically the best way to diversify its earnings from being a largely Philippine-centric company."
