21 May 1998: San Miguel Corp. of the Philippines reported a net income of Pso 103 million in the first quarter of 1998, 91% lower than Pso 1.11 billion recorded for the same period last year, as sharp…
21 May 1998: San Miguel Corp. of the Philippines reported a net income of Pso 103 million in the first quarter of 1998, 91% lower than Pso 1.11 billion recorded for the same period last year, as sharply higher financing charges and the economic slowdown took their toll on the company“s operations, reports say. Consolidated net sales for the first three months of 1998 amounted to Pso 18.7 billion, up 21% from Pso 15.4 billion, as a result of higher sales volumes, which grew collectively by 9%, and price increases. Cost of sales and operating expenses increased by 21% to Pso 17.9 billion from Pso 14.8 billion due to higher sales volumes and raw materials costs offset by cost-cutting and productivity programmes. Consolidated operating income increased by 36% to Pso 854 million from Pso 629 million a year ago as margins improved. Volumes of most of San Miguel“s domestic businesses performed strongly during the first three months of the year, with beer growing by 9%, food and agribusiness by 22% and packaging by 14%. However, the gains from this performance were offset by an increase of 90% in financing charges, the weak performance of the real estate business and a squeeze on margins in the packaging operations. Financing charges amounted to Pso 1.42 billion versus Pso 746 million due to increased borrowings and higher interest rates. Equity income from unconsolidated affiliates, mainly Nestle Phils. Inc. and Coca-Cola Amatil Ltd. (CCA)/Coca-Cola Bottlers Phils. Inc. increased by 2% to Pso 437 million from Pso 430 million. Domestic beer sales volumes in all regions posted robust growth as a result of favourable crop prices and improvements in product sales, distribution and availability. Revenue went up by 16% to Pso 6.64 billion from Pso 5.73 billion and operating income jumped by 85% to Pso 1.04 billion from Pso 563 million. International beer sales volumes fell by 14%, reflecting the economic downturn in Indonesia, Hong Kong and Vietnam. Sales volumes also softened in China due to the restructuring of the company“s distribution system. Sales revenue amounted to Pso 1.67 billion, up 21% from Pso 1.38 billion. Operating losses increased by 9% to Pso 391 million from Pso 360 million, although in dollar terms the amount declined to US$ 10.3 million from US$ 13.6 million. Earnings from the company“s soft drinks interests amounted to Pso 308 million, including income from the non-compete agreement with CCA. CCA started the year strongly, with sales volumes in the first quarter remaining around year-ago levels in Indonesia and growing by around 30% in the Philippines, 10% in Australasia, and 2% in Europe.