One Time Gain From Power Asset Sale Boosts San Miguel’s 1Q Income by Nearly 400%
Excluding the one-time gain, core net income still increased by 31% due to prudent spending and the stable performance of its core businesses.
San Miguel Corporation, one of the Philippines’ largest conglomerates, has reported a nearly four-fold surge in first-quarter earnings, thanks to one-time gains from the partial sale of power assets and foreign exchange gains.
SMC’s first quarter earnings ballooned to Php 43.4 billion from just Php 8.9 billion a year earlier.
San Miguel Global Power Holdings Corp. (SMGP) previously agreed to sell its 67% stake in the Ilijan Power Plant and another liquefied natural gas project to Manila Electric Co. and Aboitiz Power Corporation, according to a report by The Philippine Daily Inquirer.
In an official statement, SMC noted that even without the non-recurring gains, core net income still improved by 31% to Php 19 billion, which they credited to “disciplined cost management and solid performance in most of its core businesses.”
Revenues dipped by 8% mainly due to lower contributions from its Fuel and Oil, and Power businesses, due to lower crude prices and the sale of the Ilijan Power Plant. In contrast, higher sales from Food, Hard Liquor, and Infrastructure mitigated the drop.
Operating income still increased by 13% to Php 45.6 billion, while consolidated EBITDA (earnings before interest, taxes, depreciation, and amortization) rose 17% to Php 64.2 billion.
Food and Beverage
San Miguel Food and Beverage, Inc.’s net income grew by 16% to Php 11.6 billion. Its food division was boosted by revenues from its poultry, processed meats and dairy products, while San Miguel Brewery was steady with a mere 1% increase in net income.
Power, Fuel and Oil
San Miguel Global Power reported a net income of Php 26.4 billion, including the Php 21.9 billion earned from the Ilijan Power Plant sale. Even without the one-time gain, the company says its bottom line still surged by 188% to Php 4.5 billion. However, overall revenues declined by 4% to Php 42.5 billion due to the deconsolidation of the Ilijan Power Plant.
On the other hand, Petron Corporation also reported flat earnings at Php 4 billion, up by just 2% from the previous year, due to lower crude prices and weaker exports. Strong domestic sales, however, supported revenues.
Infrastructure and Cement
SMC Infrastructure’s revenues improved by 7%, as its toll road operations continued to grow. Operating income rose 10% to Php 5.3 billion while EBITDA increased 6%.
But increased competition from imports and lower demand affected the company’s cement business, with revenues dipping 4% to Php 8.9 billion. EBITDA also slid by 5% to Php 2.5 billion
A Good Start
Overall the conglomerate, whose thrust has expanded from food and beverage manufacturing to nation building, says it is happy with its first quarter results and affirmed its commitment to helping improve the lives of Filipinos through its various businesses.
“We had a good start to the year. Despite some challenges, our businesses remained resilient and continued to perform well. We will keep moving forward, grow responsibly, and make sure more Filipinos benefit from the progress we are making,” said SMC Chairman and CEO Ramon S. Ang.
