Philippines food and beverage group San Miguel Corp. (SMC) last week announced a 2% fall in net earnings to 5.26 billion pesos (US$ 281 million) from 5.38 billion pesos in 1995. If a one-time gain fro…
Philippines food and beverage group San Miguel Corp. (SMC) last week announced a 2% fall in net earnings to 5.26 billion pesos (US$ 281 million) from 5.38 billion pesos in 1995. If a one-time gain from the sale of assets in Hong Kong was included, profit rose 4% to 6.09 billion pesos in 1996 on an 11% improvement in turnover to 85 billion pesos. In a statement to the Philippines Stock Exchange, SMC blamed losses from its international beverage operations and rising debt charges for its decline in net earnings. It said operating income from the sale of beverages abroad, including soft drinks and beer, fell 2% to 8.34 billion pesos, despite a 12% increase in revenue to 67.1 billion pesos. Sales of beer alone on foreign markets dropped 3%, leading to an operating loss for the product of 671 million pesos, part of which was due to spending on brand and market development in China. SMC has three breweries in China, namely San Miguel Shunde Brewery Company, Ltd., Guangzhou San Miguel Brewery Company, Ltd. and San Miguel Bada Baoding Brewery Company Ltd. Rising costs of importing malt, a basic ingredient to produce beer, and higher depreciation levels also decreased operating income from domestic sales of beer by 4% to 3.66 billion pesos. “Nonetheless, this was an improvement from a decline of 10% in the first half last year since beer prices were not increased at all during the year,” SMC said. An SMC subsidiary, the listed liquor firm La Tondena Distillers Inc., reported a 36% increase in operating income to 1.54 billion pesos on a 30% rise in turnover to 8.43 billion pesos.