'One-time gains' double San Miguel's earnings

MANILA, Philippines - San Miguel Corp. (SMC), one of Southeast Asia’s largest food and beverage companies, said earnings last year grew by more than twice due to one-time gains from the sale of investments and properties. Consolidated net income reached P19.3 billion in 2008, a figure that included “gains from its discontinued operations," the company said in a statement. The figure is more than double its 2007 profits of P8.63 billion. “Without the non-recurring gains on sale of investments and properties, the company's net income stood at P7.22 billion, still 4 percent higher than the comparable figure in 2007," the company claimed. Meanwhile, consolidated operating income reached P14.8 billion, 26 percent higher than prior year. Other income totaled P6.66 billion, reflecting mainly the gain on San Miguel Brewery's initial public offering. Profit from continuing operations amounted to P14.7 billion, significantly higher than the prior year, said San Miguel, the Philippines’ largest publicly-listed food company. Full-year consolidated sales revenue reached P168 billion, 14 percent higher than 2007 levels of P148 billion, despite external factors which cut consumer demand, it said. Similarly, its flagship product – San Miguel Beer – “maintained its strong performance," the company said. Beer sales volume grew four percent, resulting in an 11 percent sales revenue hike to P48.8 billion. The rise in sales revenue was boosted by the turnaround of the company’s international brewing operations which posted losses last year. Steady gains were noted in Indonesia, North China, Thailand, and Hong Kong. Beer exports also helped lift revenues. Ginebra San Miguel, the company’s liquor and spirits subsidiary, posted a nine percent growth volumes while the group’s packaging business sustained its recovery on the back of robust demand for glass and plastic containers. While SMC’s food group increased prices to cover rising input costs, it was only able to pass only some increased costs to the marketplace. Total revenues reached P73.2 billion, 15 percent above 2007 figures, as the food business moved quickly to implement new systems and processes to increase efficiencies and capabilities. Stepped-up raw material substitution programs and product innovation all helped keep the food sector afloat, as did the strength of San Miguel Pure Foods' portfolio of brands and value-added products. "In a year when commodity costs were a challenge, our performance results are particularly encouraging, coming as they do from a combination of operating leverage and a tighter reining in on costs across all our businesses," SMC president and chief operating officer Ramon S. Ang said. “Our core businesses continue to benefit from the strategic and operational improvements to the company which we believe have brought greater focus to each sector as they were increasingly managed as separate businesses with new avenues to growth via the equity markets or strategic investors," he added. - GMANews.TV