Despite COVID-19 plunging the economy into recession in 2020, San Miguel Corporation (SMC) delivered a solid performance in the second half, posting P25.9 billion in net profit — 7x better than its 1st half results and 15% higher than the same period in 2019.
Even as the recoveries of its major businesses reversed SMC’s P4 billion loss in the first half, full year 2020 profit level still remained lower than 2019, ending at P21.9 billion –due largely to the economy’s contraction and quarantine restrictions.
Sales and margin improvements in the 2nd half reduced overall decline in consolidated revenues and operating income for the full year, which ended at P725.8 billion and P71.5 billion, 29% and 38% lower from the previous year, respectively. EBITDA ended at P125.9 billion, 23% lower than 2019.
“While it has not been a good year for all businesses and our economy overall, we’re encouraged by the sustained recoveries that our businesses showed in the second half. There are still so many challenges ahead–and a lot of uncertainty. But we believe our economic recovery is underway as the vaccine rollout gathers pace,” SMC president and chief operating officer Ramon S. Ang said.
“We will continue to stay focused on gaining performance improvements in this new normal while pursuing initiatives that generate jobs and deliver tangible assets to fuel our economy’s growth,” he added.
FOOD AND BEVERAGE
San Miguel Food and Beverage, Inc. registered consolidated revenues of P279.3 billion for the full year, 10% lower than the same period in 2019, but narrowing its 19% decline in the 1st half. This was driven by volume improvements in the 2nd half from its Beer business, all-time high volumes of the Spirits division, which surpassed pre-pandemic figures, and the steady growth of its Food unit’s Prepared and Packaged Foods segment throughout the year. This improvement was however slightly held back by lower volumes from the Protein and Animal Nutrition & Health segments.
SMFB’s consolidated operating income and net income ended at P33.4 billion and P22.4 billion, lower by 30% and 31%, respectively.
San Miguel Brewery, Inc. saw significant sales improvements in the 2nd half of the year, posting a 52% improvement compared to the 1st half. It ended the year with consolidated revenues of P107.9 billion. Volumes recovered starting in the third quarter, with month-on-month improvements posted until year-end. Total volumes for the year reached 202 million cases—the result of the gradual easing of restrictions and lifting of liquor bans, coupled with consumption-generating programs and direct-to-consumer initiatives. Combined with cost containment efforts, operating income amounted to P24.5 billion.
Ginebra San Miguel Inc.’s net income for the year reached P2.8 billion, 65% up from the previous year, the highest-ever recorded by the company. GSMI benefitted from continued strong consumption with volumes reaching 38.6 million cases. Marketing promotions, thematic campaigns, coupled with the continued expansion of its distribution reach, helped drive growth. Total revenues reached P36.2 billion, up 25%, while operating income grew 32% to P3.8 billion.
San Miguel Foods ended 2020 with consolidated revenues of P135.2 billion, lower by just 3% compared to the previous year. The improvement was mainly attributed to the continued solid performance of the Prepared and Packaged Foods segment, along with recoveries in the 2nd half brought by higher dine-in activities and food delivery services from consumers.
Seasonal demand surge during the holidays, together with incremental sales from community resellers – an alternative channel we created at the height of quarantine restrictions that has since grown significantly — contributed to the Food business’ improved performance.
SMC GLOBAL POWER
SMC Global Power Holdings Corp. posted full-year off-take volumes of 26,116 Gwh, translating to P115.0 billion in consolidated revenues, 15% lower than 2019. This was mainly due to the deferment of the mid-merit power supply agreement with Meralco, the extended contract with Masinloc, and low average realization rate from new power contracts. Still, this was an improvement from the 21% revenue decline in the 1st half.
Lower fuel costs and spot purchases, together with effective power dispatch strategies, further improved Global Power’s performance in the 2nd half. Operating income for the year 2020 grew 3% to P36.9 billion. Net income amounted to P18.9 billion for the same period.
SMC Global Power completed its Masinloc Unit 3 with a capacity of 335MW in September, 2020 while the construction of its 1000-MW capacity BESS project is now in full swing.
PETRON
Petron Corporation achieved a turnaround in the last two quarters of 2020, with a net profit of P2.8 billion in the 2nd half of 2020, a reversal of its P14 billion net loss in the 1st half due to stabilizing world crude prices, and subsequent inventory gains realized as prices began to rally towards year-end.
Total year performance however reflected the impact of multiple challenges Petron encountered in 2020. Consolidated revenues settled at P286.0 billion, 44% lower than the previous year, with consolidated sales volumes from both Philippine and Malaysian operations down 27% to 78.6 million barrels, from 107.0 million barrels a year ago.
Full year operating loss and net loss amounted to P4.6 billion and P11.4 billion.
INFRASTRUCTURE
SMC Infrastructure’s revenues for the year ended at P14.6 billion, down 38% from 2019, brought about by the decline in traffic volumes at all operating toll roads due to travel and quarantine restrictions. Volume improvements continued throughout the 2nd half, with combined average daily vehicle traffic in the 4th quarter reaching 80% of 2019 levels, with notable recoveries seen at SLEX and Star Tollway. Operating income amounted to P2.6 billion.
Last January 14, SMC Infrastructure opened Skyway Stage 3 to the public, cutting travel time from the South Luzon Expressway (SLEX) in Alabang to North Luzon Expressway (NLEX) in Balintawak with a speed limit of 60 km/h to between 25 – 30 minutes.
