San Miguel expected to post lower net profit

San Miguel Corp. is expected to report lower net profit for 2001 largely because of lower interest income as the company put its cash into acquisitions. In 2000, the food and beverage group posted a n…

San Miguel Corp. is expected to report lower net profit for 2001 largely because of lower interest income as the company put its cash into acquisitions. In 2000, the food and beverage group posted a net profit of PHP 7.5 billion, but excluding nonrecurring income of PHP 670 million from the redemption of a unit“s preferred shares, its net profit contracted to 6.84 billion. Many analysts say the company will be hard pressed to match even the lower figure in 2001. San Miguel was expected to release its full-year results in mid-February. In 2001 San Miguel acquired Pure Foods Corp. Through a joint venture with Coca-Cola Co., the company also bought the local soft drink operations of Coca-Cola Amatil Ltd. of Australia. As a result, the pile of cash San Miguel had accumulated from divestments has declined to PHP 19 billion from around PHP 40 billion at the end of 2000. The company had been using interest income generated from its cash reserve to service its considerable debt. In the first nine months of 2001, however, San Miguel“s net interest expenses surged to PHP 1.5 billion from PHP 552 million. And its cash reserves are likely to have dwindled further with the completion this month of its purchase of Cosmos Bottling Corp.