Beer and fuel sales revert San Miguel back to profit in Q3

MANILA, Philippines — San Miguel Corp. swung back to profit as of September, buoyed by higher beer and fuel sales after liquor and movement restrictions were lifted.

The Ang-led conglomerate reported profits worth P15 billion in the third quarter, reversing P4 billion in net losses in the first half, the company said in a disclosure to the stock exchange on Friday.

“The country has proven its adaptability and resilience in these trying times, and we, in San Miguel Corporation, will continue to deliver on our commitment to help the country build back better and stronger as we emerge from this pandemic,” Ramon Ang, president and chief operating officer, said in a statement.

Broken down, the diversified firm’s legacy beer business delivered for the entire company just after liquor prohibitions were lifted together with lockdowns. Ginebra San Miguel, in particular, improved volume sales by a third from same period a year ago. That brought year-to-date sales to 27.4 million cases, up 3% year-on-year.

Higher take-up of Ginebra’s namesake beers pulled up this segment’s 9-month operating income 18% annually to P25.34 billion.

While still in negative territory, San Miguel Brewery Inc. also performed better. Sales volumes went down 38% year-on-year to 138 million cases in the first 9 months, bringing down operating income by a fifth, albeit narrower than the 61% seen in the first half.

From January to September, the brewery’s operating income sank 44% annually to P11.08 billion.

Apart from the firm’s beer segment, San Miguel’s oil business through Petron Corp. also reverted to 2% on-year operating earnings growth in the third quarter after more public transport was allowed to ply passengers and expanded fuel retail volumes by nearly half from last year.

“Domestic volumes have started to recover, with most Petron stations in the country operating under normal hours since August,” San Miguel said. However, year-to-date operating losses amounted to P10.36 billion.

But overall traffic volumes remained down, thereby negatively affecting San Miguel’s infrastructure business heavily concentrated in toll roads. While third quarter losses tempered from previous 3 months, consolidated revenues dropped 42% year-on-year in first 9 months while operating income declined 76% to P2.1 billion. 

Apart from infrastructure, the financial performance of San Miguel’s power and food and ventures remained down as of September. The power segment, in particular, suffered from low electricity demand amid business closures that pulled down consolidated revenues 9% year-on-year.

Operating losses widened 3% year-on-year to nearly P29 billion, financial statements showed.

Meanwhile, revenues from San Miguel Foods Inc. sank 9% year-on-year from January to September “due to prevailing weakness of poultry prices, slowdown in food services and retail operations” because of the impact of African swine fever in supplies. Operating income shrank 17% from year-ago levels to P3.21 billion.

Adding to the pain was the 74% slump in operating income from the packaging business to P649 million. 

Shares at San Miguel ended flat to close the week at P104 each on Friday.