SAN  MIGUEL  CORP  PROFIT  DOUBLES  TO  P7.88 B  IN  FIRST  HALF  OF  THIS  YEAR

MANILA, AUGUST 10, 2007
(STAR) By Zinnia B. Dela Peña - Food and beverage giant San Miguel Corp. said yesterday its net income nearly doubled in the first half this year to P7.88 billion, boosted by gains from the sale of its softdrinks unit, its stake in pineapple canner Del Monte and strong sales ahead of the national elections in May.

In a filing with securities regulators, San Miguel said sales revenues rose nine percent to P112.7 billion on higher volumes of its domestic beer and food operations.

Local beer operations registered revenues of P21.2 billion, up six percent due to a three percent increase in volumes.

Operating income grew 21 percent to P5.7 billion on account of stronger volumes and contained fixed operating expenses.

Overseas, San Miguel Brewing Int’l Ltd. (SMBIL) ended the first semester with encouraging results. The second quarter’s operating income significantly narrowed the first quarter’s loss from considerable gains in North China, Australia and export operations offsetting the lower sales in Indonesia and South China.

San Miguel said its first half net profit was partly lifted by the $590 million sale of the company’s 65 percent stake in Coca-Cola Bottlers Philippines Inc. to partner The Coca-Cola Co. and gains from the sale of shares in Del Monte.

San Miguel, the third largest listed firm with a market value of $4.7 billion, said consolidated operating income fell to P8.2 billion due to the increased costs of National Foods Ltd.’s operations in Australia.

Consolidated net financing charges likewise fell 44 percent to P2.2 billion, helped by the continued appreciation of the peso against the dollar.

Hard liquor unit Ginebra San Miguel registered revenues of P6.32 billion on the back of a six percent gain on volumes, fueled by domestic liquor sales and exports. The three percent growth in revenues was driven by Ginebra San Miguel’s Bilog’s resurgence and GSM Blue’s strong performance.

Despite an improved sales mix, Ginebra’s operating income fell to P382 million as high input costs and the absorption of the eight percent excise tax offset gains in volume.

The San Miguel Food Group realized revenues of P31.7 billion in the first half, five percent higher than the previous level due to higher volumes across all products and improved selling prices particularly in the second quarter. Operating income increased 10 percent to P1.18 billion as a result of significant cost improvements in dairy, processed meats and food service operations.

The packaging group, on the other hand, registered revenues of P9.29 billion or nine percent lower than the year ago level. Operating income also declined to P157 million as overall demand remained sluggish.

Australian dairy giant National Foods, meanwhile, recorded revenues of A$ 967.6 million, up 10 percent despite the prevailing drought condition across the continent. Higher costs of imported juice concentrates amid tight fruit supply, however, dragged operating income down to A$40.8 million.

San Miguel Corp., Southeast Asia’s biggest food and beverage firm, said its net income nearly doubled to P7.88 billion in the first half of 2007 helped by the sale of its local softdrinks bottling unit, its stake in pineapple canner Del Monte and strong sales ahead of the May national elections.

In a statement San Miguel said consolidated sales revenue reached P112.7 billion, nine percent above the same period last year. While the domestic beer and food businesses improved operating income by 21 percent and 10 percent, respectively, consolidated operating income declined to P8.2 billion due to the increased costs of National Foods’ operations – a direct result of the prolonged drought in Australia. International beer operations gained in the second quarter but San Miguel’s packaging and liquor subsidiaries, although improving, are still behind last year, it said.

Consolidated net financing charges fell 44 percent to P2.23 billion, aided by the continuing strength of the peso. Other income represent gains on the sale of Del Monte shares and gains from discontinued operations. Its first half profit was partly lifted by the $590 million sale of the company’s 65 percent stake in the local unit of Coca Cola.

San Miguel’s domestic beer operations recorded three percent higher volumes, with a robust second quarter delivering for the business, six percent higher revenue at P21.2 billion. Operating income grew 21 percent to P5.7 billion on account of stronger volumes and contained fixed operating expenses.

Ginebra San Miguel Inc. ended the first half with six percent higher volumes, fueled by domestic liquor sales and exports. Revenue hit P6.32 billion – three percent higher than last year driven by Ginebra San Miguel Bilog’s resurgence and GSM Blue’s strong performance.

Despite an improved sales mix, operating income nevertheless declined to P382 million as high input costs and the absorption of the eight percent excise tax offset gains in volume.

The San Miguel Food Group brought in P31.7 billion in revenue for the first six months of 2007 – up five percent year-on-year due to higher volumes across all businesses and improved selling prices, particularly in the second quarter. Operating income rose 10 percent to P1.18 billion as a result of significant cost improvements in dairy, processed meats, and food service operations.

Meanwhile, the Packaging Group’s revenue fell nine percent to P9.29 billion. Operating income likewise declined to P157 million as over-all demand remained sluggish. Significant sales improvements in the glass, plastics and metal segments nonetheless were recorded in the second quarter, which are expected to be sustained for the rest of year.

National Foods’ first semester revenue reached A$ 967.6 million, 10 percent above last year despite the prevailing drought condition across the continent. Higher costs of imported juice concentrates amid tight fruit supply however dragged operating income down to A$ 40.8 million.


Chief News Editor: Sol Jose Vanzi

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