Ginebra sees return to profit this year

By VG Cabuag, BusinessMirror

Posted at May 09 2014 07:57 AM | Updated as of May 09 2014 03:57 PM

MANILA -- Ginebra San Miguel Inc., the liquor and beverage unit of conglomerate San Miguel Corp. on Thursday said it expects to return to profitability during the first quarter of the year, as the company says it is now “more focused” on expanding its current stable of brands.

Company President Bernard Marquez said sales volume for the first three months of the year grew by 10 percent from the previous year, while revenues were up by 21 percent year-on-year.

He said the company posted an operating income of P44 million from last year’s operating loss of P390 million. “We expect to post the same performance for the rest of the year,” Marquez said.

Ginebra has yet to disclose its financial report to the Philippine Stock Exchange.

In the first quarter last year, however, sales reached P3.1 billion, down from 2012’s P3.65 billion as the new excise-tax law that doubled its tax-rate set in.

The company incurred a net loss of P420.04-billion, wider than the P188.81 billion net loss in the first quarter of 2012.

Ramon S Ang, the company’s vice chairman and president of parent San Miguel Corp., said Ginebra is now more focused after the proposed merger with Emperador Inc., which started two years ago, did not push through.

“The talks [between Ginebra and Emperador] took a long time,” Ang said. “Back then, the merger was the focus.

But this time, the focus is to turn around Ginebra,” he said, adding that the company will relaunch its own brand of brandy in the coming months. Emperador controls this market segment in Luzon. Flagship product Ginebra San Miguel gin continued to corner most of the market in Luzon but the brandy continues not to do well in the Visayas and Mindanao.

He said when the new excise tax was imposed last year, the rate charged on the alcohol products doubled so, people turned to cheaper products. “But how can you can launch a cheaper product without lowering the alcohol? So they now call it light [alcohol products], which we will go into the mixed drinks in the coming months to target the younger market segment,” Ang said.

He added that the company is now focused on its business and will not to buy a new company for expansion or sell Ginebra to other companies.

“We’re not looking at other companies that we can buy. But most likely if there’s someone who will offer [to sell], we may end up buying them,” Ang said.