Higher beer sales increase San Miguel Brewery's profits

MANILA, Philippines - Higher beer sales lifted earnings of San Miguel Brewery Inc., the beer unit of conglomerate San Miguel Corp., for the first half of the year. Net income rose four percent to P4.86 billion as net sales revenue improved 4.2 percent to P24.8 billion, SMBI said in a statement. Operating income reached P7.6 billion in the period, a six-percent increase from the previous year. “Earnings growth was driven by continued cost of management efforts and more stable raw material prices," the company said. Ramon S. Ang, SMBI chairman, also disclosed that the company is able to fund the estimated $600 million to $700-million acquisition of the international operations of the beer business from parent San Miguel Corp. “The entire international beer operations will be bought by SMB. SMB has the financial muscle to do so, either through internal funds or getting them from banks. I hope we will be able to finish it within the year," said Ang. The domestic operation, which was earlier purchased by SMBI from the parent company for P38.8 billion, will add some $400 million to SMBI’s cash flow. SMBI has raised the amount through a local bond offering, the largest issuance so far in the Philippines. “Right now, the domestic operation is earning more but in the future, the international operations will have a bigger contribution. San Miguel has six international beer operations – North and South China, Indonesia, Hong Kong, Thailand, and Vietnam. Japanese Kirin Holdings Co. Ltd. is also a major stockholder of SMBI. SMBI is also banking on the changing trend in the local market, noting that more women and young urban professionals now drink beer, to support its growth. “In addition, we are looking to increase our sales by expanding our coverage in areas that are currently underserved. We have identified areas where we hold less-than-national average market share. Tapping these markets more effectively and efficiently will result in additional volumes," said Roberto Huang, SMBI president. - GMANews.TV