SMC income soars 29% in July to P392-M

San Miguel Corp.’s income position improved substantially last July, boosted by the continued gains of its beer, softdrinks, packaging and feeds businesses, the company said yesterday.

Powered by an operating income of P681 million in July, a strong 178 percent increase from a year ago, SMC’s consolidated net income rose 29 percent to P392 million during the period.

For the entire seven-month period this year, net income registered at P3.4 billion – still 19 percent less from last year due to costs related to the integration of its new acquisitions – on an operating level of P6.8 billion, up 25 percent from the previous period.

In the first semester, SMC’s consolidated net income fell by about 21 percent from P3.8 billion last year to P3.01 billion, inclusive of P160 million in one-off items related to integration, which include the implementation of various programs to align operations, distributions, processes and systems with the entire SMC network.

With the addition of Coca Cola Bottlers Philippines Inc., Pure Foods and Cosmos Bottling Corp., total sales increased by 21 percent to P76.2 billion in seven months.

The country’s largest food and beverage conglomerate said the sustained gains from the beer, packaging and food divisions, along with higher contributions from beverage unit CCBPI, which folded in the non-liquor line of sister company La Tondeña Distillers Inc. and Cosmos, contributed to its improved financial position.

SMC’s flagship beer division benefited from increased volume, with domestic sales rising 10 percent in July and four percent in seven months to P15.3 billion. Operating income also went up seven percent in the January-July period to P2.8 billion.

Its international beer operations, meanwhile, registered double-digit growths in volume from Vietnam, North China, Australia as well as from its exports.

Among its major subsidiaries, La Tondeña, CCBPI and the SMC Food Group yielded positive results from operations during the period. LTDI’s net income in seven months improved 46 percent to P934 million; CCBPI’s operating income went up 58 percent to P1.4 billion primarily due to price and discount alignment and lower fixed costs; while the SMC Food Group – which include Pure Foods – reported an operating income of P813 million, from P804 million last year.

As part of the corporate integration and group restructuring, SMC consolidated all non-alcoholic products, including that of Cosmos, under CCBPI’s umbrella and merged Pure Foods with SMC’s processed food operations, forming a new company named San Miguel Pure Foods Co.

SMC said the resulting structure in both these segments have allowed it to gain meaningful trade leverage, realize economies of scale, and at the same time deliver a full range of products to the consumers.

SMC chairman and CEO Eduardo Cojuangco Jr. earlier said they expect to sustain the sales uptrend within the next couple of years, sticking to a target growth of an average 30 percent in total annual sales.