San Miguel Corporation (SMC) sustained its strong financial performance in the first nine months of the year as net income surged 141% to ₱31.2 billion from the same period last year.
Its significant growth was driven by the exceptional performance of key subsidiaries Petron Corporation, San Miguel Brewery Inc. (SMB), Ginebra San Miguel Inc. (GSMI), SMC Infrastructure, and Eagle Cement Corporation (Eagle).
Consolidated operating income reached ₱110.2 billion, a 29% year-on-year growth that reflected performance improvements across its Fuel and Oil, Beverages, Packaging, Infrastructure, and Cement businesses. SMC’s Power and Food businesses, while still tracking below last year’s levels, have started to show improvements in the third quarter.
Consolidated revenues slightly decreased by 5% to ₱1.1 trillion due to lower selling prices from Petron along with a decrease in sales volumes for San Miguel Foods (SMF) and San Miguel Global Power (SMGP), but this was partly offset by higher sales in other businesses.
Consolidated EBITDA amounted to ₱154.2 billion, up 22% versus last year.
“SMC’s resilient performance in the face of economic challenges is very encouraging. Our achievements highlight our consistent focus on quality and strategic business growth. We remain dedicated to delivering exceptional service to our customers while contributing to broader national initiatives,” SMC President and CEO, Ramon S. Ang said.
FOOD AND BEVERAGE
San Miguel Food and Beverage, Inc. (SMFB) maintained its growth momentum in the third quarter, which contributed to a 6% increase in consolidated revenue to ₱276.7 billion in the first nine months. This is due to improved selling prices across its Beer, Spirits, and Food divisions.
Consolidated operating income, however, decreased by 8% to ₱34.7 billion, pulled down by rising raw material costs and lower volumes for the Food business. This was partially tempered by SMB and GSMI’s sustained performance, resulting in a net income of ₱27.5 billion, 4% higher than previous year levels.
San Miguel Brewery (SMB) continued to perform strongly throughout the nine-month period, with consolidated revenues reaching ₱108.3 billion, 9% higher than last year. This was on account of a 4% growth in domestic volumes and a 9% increase in international operations, coupled with higher selling prices.
SMB’s operating income grew 8% to ₱24.1 billion, with improvements in efficiency and cost management. Consolidated net income ended at ₱19.4 billion, up 20% from last year.
Ginebra San Miguel likewise registered a robust performance in 9M23, posting a 13% growth in revenues to ₱38.9 billion. Income from operations ended at ₱5.0 billion, up 10% over the same period last year. Meanwhile, net income reached ₱5.5 billion, 62% higher than the previous year, including a one-time gain from the transfer of product rights for the Don Papa brand.
The San Miguel Food group continued to face challenges with rising inflation and high costs of raw materials. Despite these, the group’s consolidated revenue managed to increase by 1% to ₱129.4 billion due to the continued growth in its Flour, Dairy, Coffee, Feeds, and Processed Meats businesses. The Group was able to offset the lower revenues in its Poultry and Meats business, which had been affected by limited poultry capacity earlier in the year and concerns about African Swine Fever, by improving selling prices.
As a result, consolidated operating income and net income reached ₱5.6 billion and ₱3.2 billion, respectively.
POWER
San Miguel Global Power Holdings Corp. consolidated net income surged four times from last year’s level to ₱9.1 billion, a significant turnaround from the ₱2.6 billion net loss recorded in the same period last year, due to lower foreign exchange revaluation.
Consolidated operating income improved 1% to ₱23.3 billion, as margins improved as a result of declining average coal prices and lower overall power purchases.
However, it also reported a 19% decline in consolidated off-take generation volumes for the nine-month period, still as a result of the extended outage of the 1,200 MW Ilijan Power Plant from June 2022 to June 2023. The facility underwent retrofitting to improve its efficiency and reliability while awaiting substantial completion of an adjacent full-scale LNG terminal that will receive, store and re-gassify LNG fuel.
FUEL AND OIL
Petron Corporation sustained its growth momentum in the first nine months of the year, recording consolidated sales volume of 93.6 million barrels, up 16% from the 80.4 million barrels sold in the same period last year due to volume improvements across major business segments.
Petron posted sales volume growth of 20% and maintained its overall lead in the domestic market and in the LPG sector, according to data from the Department of Energy.
Consolidated revenues for the first nine months stood at ₱587.3 billion, down from ₱631.1 billion in the same period last year, as prices corrected from their extraordinarily elevated levels last year due to the Russia-Ukraine conflict.
Even with lower revenues, Petron’s consolidated operating income reached ₱27.0 billion, a 64% jump from ₱16.5 billion in 2022, buoyed by the strong volume growth. This improvement allowed Petron to absorb increased financing costs and end the period with a consolidated net income of ₱9.5 billion, 16% higher than the ₱8.2 billion it reported a year earlier.
INFRASTRUCTURE
For the first time, SMC Infrastructure reached the million mark in combined average daily traffic volume across all its operating toll roads – 11% higher than last year. Accordingly, consolidated revenues increased 20% to ₱25.1 billion. Operating income reached ₱13.7 billion, a 35% improvement from the same period last year.
CEMENT
The cement business, composed of Eagle Cement Corporation, Northern Cement Corporation and Southern Concrete Industries, Inc., generated nine-month consolidated revenues of ₱28.9 billion, 255% higher than last year, mainly due to the consolidation of Eagle in 2023. The group swung to an operating income of ₱4.6 billion, coming from an operating loss of ₱19 million in the corresponding period last year.