SMB expects better results this year

MANILA, Philippines - San Miguel Brewery Inc. expects to top last year’s performance, mainly driven by sustained efforts to increase patronage of its products and enhancements in productivity, according to a top company official.

The beer unit of Southeast Asia’s largest food and beverage conglomerate San Miguel Corp. jacked up its net earnings last year by 17 percent to P12 billion on the back of higher volume and selling prices.

During SMB’s P3-billion fixed-rate bonds listing ceremony at the Philippine Dealing & Exchange Corp. yesterday, company president Roberto Huang said the firm remains “steadfast in besting our 2011 performance and commit ourselves to achieving higher volume and profability this year.”

Huang said SMB has exhibited strong financial performance over the past nine months despite difficult market conditions brought about by recent natural calamities.

He said that while the third quarter financial results were a bit soft, the company remains on track to meeting its financial targets especially with the onset of Christmas season.

Huang said the company’s existing capacity of 200 million cases is enough to last for some three or five years.

SMB intends to grow organically and is looking at opportunities in the local and international markets to add value to the company.

With the deadline for listed firms’ compliance with the minimum public float requirement of 10 percent nearing, the company is continuously holding talks with its Japanese partner Kirin Brewery to try to find a mutually acceptable solution to the local bourse’s directive. “We’re trying to work out a compromise to avoid delisting,” he said.

Errant firms have until the end of the year to boost their public ownership level or face monetary sanctions and suspension of trading in their shares for up to six months beginning the first trading day next year.

Huang said SMB might also ask the Philippine Stock Exchange (PSE) to extend the deadline for compliance.

If all else fails, parent firm San Miguel will have no choice but to take SMB private, Huang said.

SMB is currently the dominant player in the domestic beer market at 96 percent last year. Its contribution to the total alcoholic beverage category also exceeded targets, hitting 67 percent in 2011.

Last year, the company registered sales volumes of 223.8 million cases, translating to revenues of P72 billion or an increase of 6.4 percent from 2010.