ASEAN KEY DESTINATIONS
Power fuels San Miguel’s bottom line
San Miguel Corp.(SMC) on Friday announced the sale of its shares in Meralco to Purefoods, as the conglomerate’s power ventures fueled a surge in its profit in the first half of the year.
In a disclosure to the Philippine Stock Exchange, the food and beverage giant said its consolidated net income reached P10.8 billion, a 72-percent increase from the P6.3 billion in the same six-months last year.
High-growth subsidiaries led by Petron Corp., SMC Global Power Holdings Corp., and Manila Electric Co. led the 168-percent surge in SMC’s net sales to P263.3 billion from P98.4 billion last year.
SMC Global Power and Petron accounted for a combined 63 percent of the conglomerate’s total revenues.
“We are continuously benefiting from our strategic shift to high-growth businesses. We are confident we can bring in more value to our shareholders from the company’s ongoing diversification,” said Eduardo Cojuangco Jr., SMC chairman and chief executive.
SMC Global Power posted a 72-percent rise in its consolidated operating income for the first half to P7.7 billion.
Petron reported a net income of P6 billion buoyed by strong sales of higher-margin petrochemical products along with an increase in export volumes.
Traditional businesses in food, beverage and packaging remain major contributors to SMC’s revenue pie.
Higher beer volumes in both domestic and international markets boosted San Miguel Brewery Inc.’s financial results with consolidated revenues growing by 7 percent to P35.6 billion and operating income edging up 8 percent to P10.2 billion.
San Miguel Pure Foods’ operating income inched up 8 percent to P3 billion as a result of cost reduction programs and efficiency improvements, which cushioned the effects of rising raw material prices. Consolidated revenues grew 11 percent to P42.3 billion, benefiting from higher volumes and improved selling prices.
San Miguel Yamamura managed to hike its operating income by a percent to P1.07 billion despite a spike raw material costs and competitive pricing in the export market. Revenues rose by 4 percent to P12 billion driven by the strong performance of its glass and paper businesses and higher export sales from its Australian business.
Only Ginebra San Miguel posted weak financial results, booking a net loss from operations of P186 million, a reversal of last year’s net income of P862 million. Volumes dropped by a third, dragging net sales by 27 percent to P8.19 billion.
SMC approved the sale to Purefoods of the conglomerate’s 59.09 million shares of stock of Meralco. The said Meralco stake pertained to the shares bought from state-run Government Service Insurance System more than two years ago.
Based on the selling price of P220, the average trading price of Meralco from January 1 to July 31, and a discount of 12 percent, the transaction was worth P12.99 billion.
SMC fully paid GSIS the purchase price of the Meralco shares, which were crossed in the local bourse on August 5.
Early this year, Purefoods raised P15 billion in fresh capital from a preferred share offering, P11.24 billion of which was earmarked for potential investment opportunities and participation in its parent’s diversification into high-yielding industries.
SMC also announced that its power generation unit would conduct an initial public offering “towards the latter part of the year.” SMC Global Power’s maiden share sale could reach $500 million.
The SMC board also approved the reorganization of the power business and the increase in its authorized capital stock.
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