San Miguel Food and Beverage, Inc. (SMFB) delivered a record-breaking first half year performance, posting its highest level of revenue and profitability since its consolidation in 2018, despite the challenges of high inflation, rising fuel and raw material input prices, and currency depreciation.
Consolidated revenues grew 17% compared to the same period in 2021 to P172.1 billion, driven by gains in volume and pricing adjustment across the product portfolios of its beer, spirits, and food divisions in order to mitigate the impacts of input cost increases.
Consolidated EBITDA and consolidated income from operations managed to grow 11% and 15% to P32.4 billion and P26.6 billion, respectively. Consolidated net income was, likewise, up 8% from the same period last year to P18.8 billion.
SMFB’s Beer business reported consolidated revenues of P65.0 billion, 20% higher than last year on account of improved volumes and a price increase implemented in October last year. As restrictions eased following the COVID-19 Omicron surge in January with more on-premise outlets reopening, the Beer business implemented various campaigns in key channels. As a result, its domestic operations reported a marked volume improvement of 20% quarter-on-quarter.
Likewise, Beer’s international operations registered strong volume improvements, particularly in its Thailand, Indonesia, and Export operations.
During the period, the Beer business generated EBITDA of P17.2 billion, 16% higher than the same period last year, while income from operations jumped 22% to P14.7 billion.
Meanwhile, the Spirits business continued its momentum as revenues jumped 14% year-on-year to P23.1 billion, driven by a 9% increase in volumes and modest price increases. Strong thematic campaigns, consumer promotions, a broadening distribution network, and efficiencies all supported growth. EBITDA of the Spirits business rose 17% to P3.6 billion, while income from operations increased 25% to P3.3 billion.
SMFB’s Food business sustained its growth from the first quarter and registered consolidated revenues of P84.0 billion, a 16% increase over the prior year driven by strong volume growth in certain product categories and substantial price pass-ons to partly absorb increasing raw material costs.
Its Animal Nutrition and Health and Flour segments continued to post strong revenue growth, with both volumes and prices posting double-digit increases, while the Prepared and Packaged Food business remained resilient with moderate growth in both volume and price. Its Poultry segment, meanwhile, was faced with supply challenges due to erratic weather conditions, constraining its ability to meet a surge in foodservice demand as on-premise dining bounced back strongly. Nevertheless, tight supply pulled up prices and shored up topline performance.
Consolidated EBITDA for Food business amounted to P11.7 billion, 2% higher year-on-year, while consolidated operating income ended at P8.6 billion or a 3% improvement. The Food business has been actively working to drive its costs down by improving efficiencies, enhancing productivity, and maximizing utilization of its expansion facilities.
While the global macroeconomic outlook remains uncertain and the remainder of the year may continue to be challenging, SMFB will continue to implement various strategies and efficiencies to mitigate cost pressures and help protect profits.
“Our financial position and long-term fundamentals remain strong, notwithstanding current macroeconomic headwinds. We remain committed to delivering operational excellence and value to all our stakeholders, as well as good quality products for the everyday needs of all our consumers,” said Ramon S. Ang, SMFB President and CEO.
