San Miguel's end-June losses due for reverse despite MECQ
MANILA, Philippines — San Miguel Corp. sank into the red in the first half as lockdowns for two and a half months hit its brewery and petroleum businesses, a scenario unlikely to get a repeat despite a return to stricter restrictions.
In a disclosure to the stock exchange on Friday, the Ang-led diversified conglomerate reported a net loss of P3.9 billion from January to June, a huge reverse of the P26.15-billion profit generated same period a year ago.
While majority of the company’s ventures were in the read, save for Ginebra San Miguel Inc., San Miguel Brewery Inc. and Petron Corp. delivered the hardest blow to the conglomerate at a time local companies were taking the brunt of the pandemic and state-initiated restrictions that came with a liquor ban and a halt in public transport.
“The first half was particularly challenging for most in the business sector, but we are seeing strong indications of a recovery for SMC businesses, and we remain focused and determined to build on these gains,” Ramon Ang, the parent firm’s president and chief operating officer, said in a statement.
Although recently Metro Manila and four other key areas in Luzon returned to lockdown, April Lee Tan, research head at COL Financial, said in a text message the impact of 15-day restrictions “should be less” than the enhanced community quarantine (ECQ) from mid-March to June.
"We think there will be some recovery from the second quarter since half of that quarter was spent in ECQ and business have already started making adjustments in this pandemic," said Luis Limlingan, managing director at Regina Capital brokerage, in a Viber message.
Shares at San Miguel closed up 1.75% at P99 apiece at the end of trading week, bucking a decline in the benchmark index.
H1 performance
As it is, San Miguel said business is already showing signs of “rebound by the end of the second quarter,” but did not go into specifics. The recovery, however, was not enough to keep the conglomerate in the black during the first semester.
Overall, San Miguel posted a 31% annual decline in net sales in the first half, dealing a 74% slump from operational income during the same period.
Broken down, consolidated revenues of San Miguel Brewery dropped by a larger 39% from year-ago levels as of June. While still positive, the brewery division’s first-half operating income went down 61% year-on-year.
Petron was not as lucky. After consolidated revenues plunged 40% in an annual basis, the petroleum company registered a net P14.54-billion operating loss as of last quarter, also partly as a result of P15-billion in inventory losses and “volatile” crude prices.
In other ventures, San Miguel’s infrastructure unit also suffered an 84% annual drop in operating income even as the company pledged to push through with the construction of its projects including the Skyway Extension which resumed building last May 15.
The power business, meanwhile, saw consolidated revenues decreased 21% year-on-year, although its operating income only dipped 1% from last year.
On the flip side, San Miguel Foods saw its operating income more than double, thanks to only a slight dip in net sales.
“We are fortunate in San Miguel to have companies that provide essential products and services, and we have worked hard to continue operations and serve our people,” Ang said.
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