SMC packaging unit reports higher Q1 profit

Premium Packaging International Inc., a wholly-owned subsidiary of food and beverage giant San Miguel Corp., reported a six-fold increase in its first quarter profits this year to P21.8 million from only P3.5 million the previous year.

Primepak supplies close to three fourths of the country’s glass container requirements.

Driven by higher demand for its products, Primepak’s consolidated sales orders grew 47 percent, which improved average selling prices.

As a result, revenues climbed 51 percent to P264.6 million compared with last year’s P174.9 million while operating income surged 97 percent to P37.2 million.

"Strong topline performance, coupled with enhanced production efficiency led to the company’s improved profit performance," SMC chairman and chief exeuctive officer Eduardo Cojuangco Jr. said.

Cojuangco added that pared-down debt levels led to lower financing charges for the period to P5.3 million from last year’s P14.1 million.

In 2002, Primepak reported a turnaround in its financial performance as a result of enhanced working capital management and improved operations.

From a net loss of P73 million in 2001, Primepak ended 2002 with a net income of P119 million. Sales revenues went up by 81 percent to P925 million on the back of higher sales volume and improved product mix.

Its operations resulted to positive earnings as the company realized lower production costs brought about by enhanced plant efficiency.

Meanwhile, SMC Yamamura Fuso Molds Corp., a joint venture between SMC and Japanese firms Fuso Machine and Molds Manufacturing Co. Ltd. and Nihon Yamamura Glass Co. Ltd., reported a seven percent growth in first quarter sales volume, translating to revenues of P33.5 million or an eight percent improvement over the previous period.

The first quarter’s lower input costs enhanced Fuso Mold’s gross margin by 10 percent, translating to a 19 percent expansion in gross profit to P15.3 million.

Fuso Molds, which is considered to be one of the most advanced glass container mold manufacturing facilities in Asia (outside Japan), mainly services the glass mold requirements of SMC’s packaging business.

SMC’s five manufacturing facilities in the Philippines produce glass containers for food, beverage, pharmaceuticals, personal care products, and chemical industries. Bulk of the products manufactured, however, are glass bottles for the beverage industry.