‘Operations remain sound’: SMC core profit jumps 48% in first half

Conglomerate San Miguel Corp. grew first-half core net income by 48 percent to P54.2 billion as its power, fuel and food businesses held up against higher costs and cautious consumer spending.

Revenue climbed 34 percent to P964.1 billion, putting the conglomerate close to P1 trillion in sales in just six months, while operating income increased 17 percent to P102.3 billion.

Reported net income fell 44 percent to P37.7 billion, reflecting foreign exchange effects and other non-core items, while the year-earlier result included a P21.9-billion one-time gain from the deconsolidation of certain power assets.

Management's view

“Our businesses performed well in the first half despite a more challenging operating environment. While cost and market pressures may continue, our underlying operations remain sound," SMC chair and CEO Ramon S. Ang said in a statement on Monday. 

 "We will stay disciplined on costs, continue improving efficiency, and invest in areas that support our long-term growth and the country’s broader economic development,” he added. 

Ramon S. Ang 

SMC chair, CEO 

Power delivers

San Miguel Global Power emerged as the standout earnings driver, while Petron delivered much of the group’s revenue growth but faced heavier cost pressure:

• Power: Revenue rose 27 percent to P101.9 billion, while operating income surged 90 percent to P42 billion.
• Petron: Revenue jumped 57 percent to P605.9 billion on higher prices and volumes, but net income fell 27 percent to P3.8 billion as crude, freight and other costs increased.

Consumers feel the pressure

San Miguel Food and Beverage grew revenue 2 percent to P205.3 billion, but net income declined 4 percent to P22.1 billion as performance diverged across its major businesses:

• Food: Revenue rose 5 percent to P99.3 billion and net income increased 8 percent to P6.4 billion.
• Beer: Revenue slipped 1 percent to P73.7 billion and net income fell 12 percent to P11.4 billion as consumers became more selective with discretionary spending.
• Spirits: Revenue was steady at P32.3 billion while net income increased 3 percent to P4.4 billion.

Infrastructure holds up

SMC Infrastructure grew revenue 3 percent to P20.5 billion and ebitda 8 percent to P17 billion even as average daily traffic slipped 1 percent amid elevated fuel prices.

Cement revenue edged up 2 percent to P18.2 billion as higher volumes and market-share gains offset lower selling prices, although operating income declined 9 percent amid intense competition and pressure from imports.

—Edited by Miguel R. Camus