San Miguel Corporation (SMC) posted net income of PHP 8.89 billion for the first quarter, down 50% from PHP 17.74 billion in the same period last year.

SMC said in its most recent earnings release that the decrease was due to “global economic challenges,” noting that before accounting for foreign exchange adjustments, its net income actually grew 61% to PGP 14.5 billion.

The conglomerate reported a 13% increase in consolidated revenues to PHP 392.7 billion for the quarter, which it attributed to the performance of key businesses. These included its Spirits, Food, Power, Fuels, and Infrastructure units, which reported significant volume growth due to higher demand.

SMC added that operational efficiencies and strategic cost management led to a 15% rise in its operating income to PHP 40.5 billion while its EBITDA grew by 8% to PHP 54.8 billion.

“SMC’s performance for the first quarter sets a solid foundation for the remainder of the year,” SMC President and CEO Ramon S. Ang said. “Our strategic business decisions and market leadership continue to drive sustainable value creation for our shareholders. With our diversified business model, we are optimistic that 2024 will sustain our history of growth.” 

San Miguel Food and Beverage: Buoyed by Easing of Raw Material Prices

San Miguel Food and Beverage Inc.’s (SMFB) consolidated operating income rose 13% to PHP 13.1 billion, fueled by increased sales in its Food and Spirits divisions. On a year-over-year basis, consolidated revenues increased 2% to PHP 95.4 billion, while net income rose 1% to almost PHP 10.0 billion. Operating income leapt 78% to PHP 2.7 billion, buoyed by higher gross profits with the easing of key raw material prices, and improved efficiencies at company-owned facilities, it said.

SMFB’s food business sustained top-line growth with consolidated sales reaching PHP 43.0 billion, an increase of 2%, driven by higher volumes across most of its segments. Its spirits business delivered a 17% increase in revenues, fueled by an 8% rise in volumes and better selling prices.

However, its Beer business posted 3% lower year-over-year consolidated revenues of PHP 37.4 billion, due to reduced volumes. The company noted that the first quarter of last year had seen higher volumes “due to a trade build-up in anticipation of a price increase in March.” Its Beer International business also reported a slight decline in volumes due to market mix changes. 

San Miguel Global Power: Impacted by Foreign Exchange Loss

San Miguel Global Power Holdings Corp. (SMGP) saw a 7% increase in consolidated revenues to PHP 44.1 billion, underpinned by a 71% increase in off-take volumes with Meralco and a new retail electricity supplier (RES) for Limay Power Plant.

The completion of 10 battery energy storage system (BESS) facilities with a combined capacity of 330 megawatt-hours boosted BESS’ revenues from ancillary services rendered to NGCP. The company explained that this was tempered by a lower average realization price due to the decline in GC Newcastle coal-indexed price and average spot prices.

SMGP’s operating income increased 17% to PHP 8.8 billion, while net income ended lower at PHP 1.5 billion, impacted by a foreign exchange loss of PHP 1.4 billion. The company noted that net income would have grown 15% to PHP 2.7 million without the recognized net foreign exchange loss/gain after tax impact in the first quarter of 2024 and 2023.

Petron: Export volumes and Sales Surge

Petron Corporation registered 16% growth in net income to PHP 3.9 billion across all business segments in its Philippine and Malaysian operations. Its consolidated sales volume was recorded at 35.3 million barrels, 23% higher year over year. Sales volume growth was supported by higher production at Petron’s refinery in Bataan and Port Dickson in Malaysia, it stated.

Petron’s consolidated retail sales were up 11%, driven by the sustained market recovery and its retail execution, while commercial volumes rose 11% on the substantial jump in jet fuel and LPG sales. Export volumes surged by over 90% from the additional export volumes resulting from higher refinery production, the company said.

With Petron’s strong volume growth, consolidated revenues for the first three months reached PHP 227.6 billion, up 21% from the same period in the previous year. Its operating income was PHP 10.2 billion, a 21% improvement from last year’s PHP 8.4 billion.

San Miguel Infrastructure sustained its strong performance from last year, achieving 9% revenue growth for the quarter, supported by a 3% increase in daily average volumes of its combined tollways.

SMC’s Cement Business, which includes Eagle Cement Corporation, Northern Cement Corporation, and Southern Concrete Industries, Inc., reported consolidated revenues of PHP 9.3 billion for the quarter, declining 10% year over year. This was due to a significant drop in the average selling price of cement driven by increased competition from imported cement, it said, adding that “lower cost of inputs and utilities helped cushion the impact of industry-wide aggressive pricing strategies.”