Philippines: San Miguel surpasses pre-pandemic profits

San Miguel Food and Beverage, Inc. (SMFB) delivered solid financial results in the first six months of 2021 driven by stronger operating performance across all divisions. SMFB recorded consolidated revenues of P146.79 billion, up 20% from the same period last year.

EBITDA was at PHP 29.28 billion (USD 580m), up 66% from the same period in 2020, representing margins of over 20%. Operating income, meanwhile, more than doubled to PHP 23.04 billion (USD 456m), driven by improvements in volumes and selling prices across the divisions, as well as continued group-wide cost-containment efforts and operational efficiencies. As a result, first half consolidated net income of PHP 17.36 billion (USD 344m) was up 137%, surpassing pre-pandemic profits in the first half of 2019.

“Our performance in the first half reflects the agility and adaptability of our food and beverage businesses, in the face of unprecedented challenges brought about by COVID-19. As the situation continues to evolve, the flexibility and resilience we developed this past year will enable us to move forward and pivot quickly as needed,” said SMFB president and CEO Ramon S. Ang.

The Food Group delivered a stellar business performance in the first half of the year. Consolidated revenues rose 11% to PHP 72.24 billion (USD 1.43 bn), primarily driven by its Protein and Animal Nutrition businesses, which posted double-digit volume growth. Protein revenues climbed 20% during the period due to strong demand for poultry products through retail channels, including community resellers, and the recovery of foodservice accounts. The segment also benefitted from stable poultry supply and favorable prices. Finally, core products within the Prepared and Packaged Food and Flour portfolio posted good volumes as they continued to be top-of-mind, essential items for consumers nationwide.

The Beer business registered a rebound as consolidated sales volumes improved 15% versus last year, with the easing of quarantine restrictions and lifting of liquor bans in its markets. This resulted in consolidated revenues of PHP 54.33 billion (USD 1.08bn) for the first half of the year, up 27% from the same period in 2020. Coupled with cost reduction initiatives, consolidated operating income of the Beer business grew 64% to reach PHP 12.08 billion (USD 239.3m). EBITDA amounted to PHP 14.75 billion (USD 292.5m), up 52%, while net income rose 89% to PHP 9.51 billion (USD 188.7m) in the first half of the year.

The Spirits business continued its strong performance in the first semester as volumes increased 21% year-on-year. It continued to introduce relevant marketing campaigns and promotions, expand distribution, and sustain supply chain efficiencies. As a result, the Spirits business generated revenues of PHP 20.23 billion (USD 401.3m), 36% higher than the previous year. Income from operations rose 45% to PHP 2.61 billion (USD 51.8m). EBITDA increased 35% to PHP 3.10 billion (USD 61.5m), while its net income jumped 66% to PHP 2.09 billion (USD 41.5m).

The Food group’s consolidated EBITDA doubled to PHP 11.44 billion (USD 227m), while operating income increased more than three-fold to PHP 8.36 billion (USD 165.8m) on higher gross profit and lower selling, general, and administrative expenses.

To further expand product reach and address growing consumer preference for no-contact buying methods, SMFB recently launched The SMC Hub, its new and improved online shopping platform showcasing its various products lines. While our country still faces some uncertainty due to the pandemic, we are committed to doing everything we can to help mitigate its impacts. In particular, the San Miguel Group’s nationwide “Ligtas Lahat” vaccination program for all our employees is well underway. Moving forward, we will continue to invest in areas that will boost our recovery, maximize shareholder value, while fulfilling the needs of our consumers, communities, and the country,” said Ang.

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