San Miguel Q2 net up 50pc, as economy’s growth lifts demand
MANILA, Aug 13 – Philippine conglomerate San Miguel Corp posted a more than 50 per cent rise in second-quarter net income, driven by earnings from its energy businesses as demand grew on the back of strong domestic growth, and as new acquisitions contributed.
The results from Philippines’ largest beverage, food and packaging company, whose revenues make up about 5 per cent of the country’s US$200 billion (RM624.46 billion) gross domestic product, reflect a domestic economy that has been resilient despite weakening global demand hurting the country’s exports.
The Philippine economy grew at an annual pace of 6.4 per cent in the first quarter, powered by government spending and domestic demand. In an interview in July, Philippine President Benigno Aquino said second-quarter growth may be even faster.
San Miguel, which started operations in 1890 making beer, has capitalised on that growth by diversifying into power, telecommunications and infrastructure sectors. It now has a portfolio of more than 400 products.
In April it bought shares worth US$500 million in flag carrier Philippine Airlines and a sister airline, adding to a string of acquisitions and investments worth more than US$5 billion over the past four years.
It posted a net profit of 5.6 billion pesos (RM420 million) for April-June compared to the previous period’s 3.7 billion pesos, according to Reuters’ calculations from its first-half results.
There were no quarterly profit estimates available but analysts expect San Miguel to post a 65 per cent rise in net income to 19.3 billion pesos this year, according to Thomson Reuters I/B/E/S.
San Miguel recently forecast 2013 revenue to climb to US$24 billion from a projected US$20 billion this year and has said it might make more acquisitions in the near term.
The conglomerate’s flagship firm, San Miguel Brewery, part-owned by Japan’s Kirin Holdings, had net sales of 37 billion pesos in the first half, up 4 per cent from the previous year. The company did not provide net profit details.
San Miguel also launched today its offer of up to 1.067 billion preferred shares at 75 pesos per share, the biggest-ever share sale by a local firm.
The company seeks to raise as much as 80 billion pesos from the primary offer to refinance costly preferred shares worth 72.8 billion pesos issued in 2009.
Shares in San Miguel, which has a market value of around US$6.4 billion, the country’s seventh biggest, fell 0.8 per cent today in a broad market that was up 0.2 per cent. The shares have fallen about 4 per cent this year, underperforming the broader market’s 20 per cent gain. – Reuters