Omicron surge, rising costs dent income of SMC in Q1

Conglomerate San Miguel Corp. (SMC) said its income in the first quarter fell 19 percent to P13.94 billion from last year’s P17.17 billion due to the weak performance of its food and beverage and power businesses.

The company’s recurring income, which strips off the adjustment from the Corporate Recovery and Tax Incentives for Enterprises Act, came in almost flat at P13.94 billion, compared to the previous year’s P13.56 billion.

Consolidated revenues, however, surged 57 percent to P316.8 billion from last year’s P201.16 billion, as its major businesses such as Petron Corp. recovered and saw volume growth and better selling prices.

“Overall, we are off to a good start this year, with volumes and revenues showing robust growth. While we are still seeing mixed results from our businesses due to the Omicron surge disruption at the start of the year and significant increases in raw material prices, we are well-positioned to build on our gains,” San Miguel President and CEO Ramon S. Ang said.

“Economic activity is returning to pre-pandemic levels, our workforce has been fully vaccinated, and we have managed to keep the virus under control. With these, we are confident we can sustain our target levels of growth.”

San Miguel Food and Beverage Inc.’s income fell 5 percent to P9.15 billion from last year’s P9.67 billion, despite posting a 9-percent growth in net sales.

The company said the significant increases in the prices of major raw materials, along with supply chain challenges and skyrocketing fuel prices, squeezed margins.

San Miguel Brewery Inc.’s income declined 10 percent to P4.93 billion from last year’s P5.45 billion, while the profit of its food unit also fell by 10 percent to P3.03 billion from last year’s P3.38 billion.

The company said the increase in revenues were mainly due to growth in its international operations, coupled with the domestic price increase implemented starting October 2021, which compensated for lower volumes caused by the lockdowns in January due to the Omicron surge.

Ginebra San Miguel Inc.’s income rose 34 percent to P1.39 billion from last year’s P1.04 billion as sales climbed to P12.62 billion, up 11 percent from the previous year’s P11.33 billion.

SMC Global Power Holdings Corp.’s income plunged 75 percent to P1.92 billion from the previous year’s P7.77 billion.

Sales rose 57 percent to P43 billion, from P27.4 billion last year due to higher average realization prices for bilateral contracts with fuel pass-on charges, higher spot sales prices, and higher volumes from increased nominations from the Manila Electric Co. and other distributors and industrial customers.

Petron more than doubled its income to P3.59 billion from last year’s P1.73 billion. Revenues also doubled to P172.33 billion from last year’s P83.3 billion with the recovery in demand and higher international prices.

SMC Infrastructure’s operating income grew 108 percent to P2.46 billion from last year’s P1.18 billion, as it registered double-digit volume growth for the period, driven by higher traffic flows in February and March. This offset the impact of travel restrictions imposed in January.

Consolidated revenues ended at P6.2 billion, up 44 percent from last year’s P4.33 billion.