San Miguel Posts Highest Profit in Three Years, Exceeds Forecast
San Miguel Corp., the largest Philippine food and drinks company, said that net income rose by more than half in 2012 to the highest level in three years, boosted by higher earnings at its beer and power units.
Net income grew 57 percent to 27.6 billion pesos ($677 million) as sales increased 30 percent to 698.9 billion pesos, an exchange filing showed. The profit was the highest since 2009 and exceeded an average of analysts’ forecasts of 14.47 billion pesos, according to data and estimates compiled by Bloomberg.
“Our core businesses continued to show marked and sustained improvement, while our new businesses have added scale, stability and robust revenue streams,” President Ramon Ang said in a statement.
San Miguel, brewer of the century-old namesake beer brand, has diversified from food and drinks into industries including oil, power and infrastructure to meet a goal of eventually boosting revenue to $50 billion in five years, Ang said last week. The company last month announced plans to invest $35 billion over the medium to long term in ventures such as Petron Corp. (PCOR) and Philippine Airlines Inc.
“San Miguel’s diversification seems to be paying off,” said Jonathan Ravelas, chief market strategist at BDO Unibank Inc. (BDO), the nation’s largest lender. “The company would need more acquisitions to sustain this profit growth.”
San Miguel is the nation’s biggest electricity producer through unit SMC Global Power Holdings Corp., which posted a 2 percent rise in operating profit last year. It also controls Petron, the larger of the country’s two oil refiners, and San Miguel Brewery Inc. In April 2012, it bought a 49 percent stake in flag carrier Philippine Airlines.
Overseas oil and gas fields that can produce 1 million barrels per day are among projects that San Miguel seeks to add to its portfolio, Ang said earlier this month. The company may invest $25 billion in such ventures, he said.
Operating income at unit San Miguel Brewery, the nation’s largest brewer, rose 9 percent to 22.4 billion pesos, the filing showed. The parent’s operating income fell 6 percent to 52.8 billion pesos, it said today, citing volatile crude prices and higher costs of raw materials in its food business.
To contact the reporter on this story: Ian Sayson in Manila at email@example.com
To contact the editor responsible for this story: Colin Keatinge at firstname.lastname@example.org