San Miguel 2011 Net Profit Down 13% At PHP17.5 Billion
03/28/2012| 06:15am US/Eastern
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-- San Miguel's 2011 net profit falls 13%
-- Profit in 2010 was bolstered by one-off items
-- Petron, San Miguel Global account for 63% of group revenue
-- Infrastructure projects to start contributing earnings later this year
(Adds more details on San Miguel's operating income in the 4th paragraph and performance of other businesses between 5th and last paragraphs.)
By Cris Larano
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San Miguel Corp. (SMC.PH) said Wednesday its 2011 net profit declined 13% as its year-earlier earnings were boosted by one-off items, though the conglomerate's revenue surged due to its diversification into energy-related businesses.
Net profit for the 12 months ended Dec. 31 fell to PHP17.5 billion ($407 million) from PHP20.1 billion in 2010 even as revenue more than doubled to PHP536 billion from PHP246 billion due to contributions from oil refining unit Petron Corp. (>> Petron Corporation) and SMC Global Power. Together, the two energy-related businesses contributed 63% of group revenue.
The company said that if one-off items last year and gains from the acquisition of SMC Global and foreign exchange transactions in 2010 were excluded, net profit for 2011 would have been PHP17.3 billion, higher than PHP12.7 billion in 2010.
Operating income climbed 62% to PHP56 billion from PHP34.6 billion.
Petron earlier reported its 2011 net profit rose 7% to PHP8.47 billion on a 20% growth in sales to PHP273.9 billion. San Miguel Global reported a 3% increase in operating income to PHP16.72 billion on an 8% increase in net sales to PHP71.45 billion after generating 31% more electricity in 2011.
San Miguel said it expects Petron to generate savings once the first phase of its new power plant at its refinery in Bataan, north of Manila, comes onstream early in 2013.
San Miguel Brewery Inc. (>> San Miguel Brewery, Inc.), whose other major shareholder is Japan's Kirin Holdings Co. (2503.TO), reported operating income of PHP20.47 billion, up 10%, as sales in 2011 rose to PHP71.91 billion from PHP67.58 billion in the previous year. Sales volume increased 1% to 223.8 million cases of beer, with sales in overseas markets growing 5% and local sales up 1%.
San Miguel said its infrastructure projects are on track and should start contributing to earnings this year. It said the revamp of the existing terminal at the airport in Caticlan, the main gateway to the country's top tourism draw of Boracay, has been completed and preparations are underway to extend the runway.
The company said it expects the Tarlac-Pangasinan-La Union Expressway to contribute to revenue when a 16-kilometer stretch of the highway is opened in the last quarter of this year. San Miguel recently acquired a 46.6% stake in Atlantic Aurum Inc. in a deal with Citra Group that gave it a stake in the elevated toll road and in the highway that links Manila with the country's southern provinces.
San Miguel said its food unit's revenue climbed 11% in 2011 to a record PHP89.6 billion while operating income increased 4% to PHP6.14 billion.
The company said its liquor unit, Ginebra San Miguel Inc. (GSMI.PH), swung to an operating loss of PHP891 million from operating income of PHP1.52 billion because of aggressive competition. San Miguel said it expects a recovery for Ginebra this year.
-By Cris Larano, Dow Jones Newswires; 632-848-5051; cris.larano@dowjones.com
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