San Miguel Net Income Declines 60% to 7.5 Billion Pesos

San Miguel Corp. (SMC), the Philippines’ largest company, said nine-month profit slumped 60 percent after foreign exchange losses.

Net income declined to 7.5 billion pesos ($172 million) in the nine months through September from 18.7 billion pesos, according to a presentation on the website of the Manila-based company. It posted a foreign exchange loss of 12.3 billion pesos in the period from currency gains a year earlier. Sales rose 7 percent to 542.6 billion pesos.

Shares fell 3.6 percent to 72 pesos, the lowest closing price since Sept. 23, in Manila trading. The stock has declined 32 percent this year, compared with a 7.8 percent gain in the benchmark Philippine Stock Exchange Index.

Profit in the third quarter was 9.9 billion pesos, based on figures derived from the nine-month earnings reported by the company. San Miguel, which had posted a first-half loss of 2.4 billion pesos, returned to profit in the third quarter after agreeing to sell its stake in Manila Electric Co. (MER)

The Philippines’ largest company by revenue agreed to sell its 27 percent stake in Manila Electric, the nation’s largest power distribution utility, for about $2 billion, President Ramon Ang said on Sept. 30, helping fuel its expansion. San Miguel, which started as a brewer more than 100 years ago, has forayed into industries such as airlines, mining, power, oil and infrastructure to boost returns.

Ang said on Nov. 6 he expects the peso to strengthen this quarter, enabling San Miguel to remain profitable this year. The Philippine currency declined almost 4 percent against the dollar in the 12 months through September.

To contact the reporter on this story: Cecilia Yap in Manila at cyap19@bloomberg.net

To contact the editors responsible for this story: Lars Klemming at lklemming@bloomberg.net; Frank Longid at flongid@bloomberg.net; Chua Baizhen at bchua14@bloomberg.net

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