SMC profit jumps 41% to P11.6 B in 9 mos

MANILA, Philippines - Food-to-power conglomerate San Miguel Corp. (SMC) said its profit surged 41 percent in the first nine months this year to P11.6 billion as revenues more than doubled, boosted by ventures in oil and electricity.

In a report to the Philippine Stock Exchange yesterday, SMC said net sales surged 143 percent to P393.44 billion from P161.82 billion a year earlier, while operating income more than doubled to P41.95 billion from P19.74 billion.

However, SMC said with the inclusion of one-off items, its total profit dropped 6.3 percent to P11.9 billion during the nine-month period. The company bought out SMC Global – then named Global 5000 Investment Inc. – in the third quarter of 2010, helping power earnings during that period.

SMC Global owns power generating plants and a stake in power distribution giant Manila Electric Co. (Meralco).

SMC chairman and chief executive officer Eduardo M. Cojuangco Jr. said the group expects to perform better in the fourth quarter, pointing out it has managed to “build leadership positions in new businesses where important trends are driving future growth.”

“So while the economy still gives us reason to be cautious, we are confident that we can deliver on our commitments to our stakeholders,” Cojuangco said.

He said SMC, the biggest food and beverage conglomerate in Southeast Asia, has made significant strides in its diversification strategy. It now controls Petron Corp., the country’s largest oil refiner, operates a number of big power generating plants, and has a minority stake in Meralco.

Last August, SMC signed a sale and purchase agreement to acquire the downstream business in Malaysia of US oil giant ExxonMobil.

Cojuangco added that preparations for the expansion of its Boracay Airport in Caticlan are also underway. The plan includes the extension of the runway, construction of a new and bigger terminal, and improvement of navigational aids. Meanwhile, construction of Phase 1 of the Tarlac-Pangasinan La Union Expressway (TPLEx) from Tarlac to Gerona is on track for completion and operation by the first quarter of 2012.

SMC said its oil unit Petron posted a net profit of P7.6 billion, up 42 percent from the year earlier as revenues increased 19 percent to P202 billion owing to an increase in exports and sales of higher-margin petrochemicals.

Flagship firm San Miguel Brewery Inc., partly owned by Kirin Holdings of Japan, registered sales of P52.08 billion, up seven percent year-on-year as volume went up three percent      to 165.8 million cases. Income from operations climbed nine percent to P14.65 billion owing to sustained costs and huge improvement in its international beer operations.