San Miguel has reported a fall in net income in the first six months of this year, despite a rise in revenues, as the company continued to be hit by increasing costs.

The Philippine food and drink conglomerate reported consolidated net income of PHP3.85bn (US$69m) for the period, a fall of 8.4% on the same period last year.

"The company experienced continued increases in cost of raw materials, packaging and utilities, as well as higher financing charges as San Miguel took on additional funding for acquisitions and expansions," a statement said.

San Miguel posted PHP100.6bn in consolidated revenue in the 2005 first semester, 24% higher than last year.

Revenue from San Miguel Beer Division (SMBD) Philippine operations increased 11% to PHP20.44bn. Operating income was up by 8% at PHP4.33bn due to stable malt prices and higher average selling prices. Despite higher excise taxes, volume level has been sustained on the back of new programs to boost sales.

SMBD International's operating profit surged five-fold as distribution and operations achieved further efficiency. Overall sales volume jumped 12% following the strong performance of SMC's Indonesian and Australian beer operations. SMBD also achieved gains in its China operations (including Hong Kong) where volume grew 10% versus last year due to the strong performance of Dragon, Blue Star and other economy brands.

Ginebra San Miguel Inc (GSMI) sales revenue rose 3% to PHP6.2bn. Experiencing a softening liquor market as well as rising cost pressures particularly on major raw materials and higher excise taxes, GSMI posted an operating income of P781m.

First-half sales volume of the Coca-Cola Beverage Group registered a significant improvement from the first quarter. This is attributable to a marked upturn in sales in May and June particularly for water and juices. Sales revenue for the first half amounted to P20.0 billion, while consolidated operating income stood at PHP695m.

Revenue of Berri Limited, San Miguel's Australian juice manufacturing unit, reached A$247.3m, 2% better than last year. Operating income was on a par with last year at A$13.7m.