MANILA, Philippines - Diversifying conglomerate San Miguel Corp. expects to continue this fourth quarter the trend of posting double-digit profit growth.
The food-to-power company is banking on better performance of its operating units to record robust earnings for the entire year, its top executive said.
“Yes, for the full year 2012,” San Miguel president and chief operating officer Ramon S. Ang said in a chance interview when asked if the conglomerate is projecting to post strong double-digit income growth.
Last year, San Miguel’s net income declined 13 percent to P17.5 billion with the absence of non-recurring gains from the previous year.
Ang said San Miguel expects more than 50 percent surge in profits for the entire year given good results in the previous quarters.
In the nine months to September, San Miguel’s net earnings surged 61 percent to P19.2 billion, mainly due to foreign exchange gains and increased contributions from its power generation unit.
Consolidated sales revenues jumped 29 percent to P509.2 billion in the nine-month period on higher sales of SMC Global Power Corp. as well as favorable selling prices for its branded products.
San Miguel operates four power plants: the Limay combined-cycle power plant in Bataan, the Ilijan natural gas-fired power plant in Batangas, the Sual coal-fired plant in Pangasinan and the San Roque hydroelectric power plant also in Pangasinan.
Specifically, SMC Global recorded P57.4 billion in revenues, up seven percent from last year. Its operating income climbed 26 percent to P13.9 billion due to a combination of higher revenues and a decline in operating expenses.
Flagship unit San Miguel Brewery Inc. posted a five-percent increase in operating income at P15.4 billion due to management of fixed costs and improved operating performance for the international business.
San Miguel Yamamura Packaging Corp. and liquor unit Ginebra San Miguel Inc. also reported better performances.
This offset lower income contribution from Petron Corp. and San Miguel Pure Foods Co. Inc. that was hit by volatility in fuel prices and higher operating and financing costs, respectively.
Meanwhile, the conglomerate is still lukewarm with the initial public offering (IPO) of power generation unit SMC Global.
Ang said the IPO is indefinitely on hold. SMC Global earlier planned to raise P24.7-36.6 billion by selling 348-519.7 million in primary and secondary shares in the local bourse.
“We are trying [to conduct the IPO next year]. That is a big money,” Ang said.
Despite the local stock market posting numerous record highs this year, Ang said only the domestic market is performing well, with some foreign stock markets still lagging.
Specifically, developed markets in the US and Europe are still underperforming given their economic and debt woes.