Ginebra San Miguel income soars 75.6% to P425 million in first half

MANILA, Philippines - Ginebra San Miguel Inc., (GSMI) the hard liquor unit of Conglomerate San Miguel Corp., reported a 75.6-percent jump in its first half net income this year to P425 million on robust sales, successful cost-containment measures and strong brands.

Sales revenues rose 28 percent during the period to P9.34 billion from P7.3 billion a year earlier while gross earnings surged 41.2 percent to P867 million from P614 million.

At the company’s annual stockholders meeting yesterday, GSMI chairman and chief executive Eduardo M. Cojuangco Jr. said the company expects to sustain its growth for the remainder of the year by aggressively managing costs and strengthening its existing brands which are currently enjoying strong sales.

“We will continue to focus on driving growth in an environment of tough raw material and commodity inflation,” he said.

Cojuangco said GSMI expects new businesses which include non-alcoholic beverages such as fruit juices, iced tea and purified water, to post higher contributions this year. 

“This adds dimension to the company, providing us a broader category participation in beverages that we can both exploit and expand. We believe our current business portfolio offers excellent prospects for future growth,” he said.

GSMI likewise expects to register revenues from Thai San Miguel Ltd., its joint venture company in Thailand. Cojuangco said while the contribution will be relatively small in the medium-term, its real value is that it expands the company’s raw material base as a possible source of alcohol and liquor products.

In line with efforts to further bring down costs, GSMI has forged a tolling agreement with two entities which will set up tolling facilities in Isabela and Bicol provinces under a build-operate-transfer agreement. The plants will have the capacity to produce a total of 800,000 cases a month. 

“There will be no cash out on our part since this is a BOT deal,” said Ramon S. Ang, director of GSMI and chief executive officer of San Miguel .

Aside from this, GSMI continues to look for the lowest possible packaging costs through dealers and business partners without sacrificing the image of the quality of its products. It has implemented a second-hand bottle retrieval system and is re-working to minimize brand new bottle costs and other packaging costs. – Zinnia Dela Peña