USA: San Miguel Corporation's nine month profits rise 24%
Operating income amounted to P5.6 billion ($124 million), up 20% from P4.6 billion in 1999, resulting primarily from La Tondena's strong performance and improvements in San Miguel Beer Division's international operations and SMC's packaging business. These gains were achieved amid weak demand and spiraling fuel and raw material costs.
Revenue for the first nine months amounted to P63.8 billion ($1.4 billion), up 16% from P55.1 billion a year ago. Sales volume increases ranging from 7% to 15% were posted in SMC's major businesses. In aggregate terms, volume grew by 14% compared to last year.
SMC's revenue from its Philippine beer operations in the January-September period increased 5% to P21.4 billion ($475 million) while operating income stood at P3.2 billion ($71 million), 3% better than a year ago. San Miguel now accounts for over 90% of the Philippine beer market following more aggressive distribution and market penetration.
Trade receivables as of September 30, 2000 were at P6.9 billion ($153 million), down from P7.8 billion in June 30, 2000. Consequently, the day level of trade receivables declined from 62 days to 56 days.
SMC's international beer operations continued its turnaround that started earlier this year. Year-to-date sales volume hit a record 28.6 million cases, 11% higher than 1999 following improvements in distribution and marketing initiatives, especially for low-end popular beer brands.
Third quarter international beer revenue rose 11% to $68.9 million. On year-to-date, revenue amounted to $174.8 million, while operating income totaled $3.2 million, a reversal of the $5.1 million loss last year. San Miguel's operations in South China, Hong Kong and Indonesia continued to be the main profit contributors.
J. Boag & Son, the Australian premium brewer acquired by San Miguel in July, racked up a volume of approximately 851,000 cases, up 33% over 1999, ahead of the 20% volume growth of the premium beer segment in Australia. Consequently, revenue was at $10.2 million while operating income was $822,000. SMC expects that upcoming programs to maximize brewery capacity will further enhance these results.
Benefiting from a diversified business portfolio, La Tondena Distillers Inc. (LTDI) yielded P1.1 billion ($24 million) in profits during the first nine months of the year, up 52% from P708 million in the same period in 1999. The new Sugarland Beverage Corporation subsidiary contributed 11% to La Tondena's total revenue of P10.3 billion ($229 million). Year-to-date volumes of liquor increased 12%, with growth strongest in jelly snacks, water and juices. Days level of LTDI's accounts receivables was reduced from 69 days in June to 65 days as of the end of the third quarter.
San Miguel Food Group (SMFG) continued to improve at a faster pace in the third quarter versus the first half. Most products registered third quarter growth rates ranging from 46% for basic meats, 35% for feeds and 8% for chicken.
SMFG revenue increased by 17% to P4.5 billion ($100 million) in the third quarter and by 11% to P12.5 billion ($278 million) for the year to date. Third quarter operating income totaled P118 million ($2.6 million) versus P75 million in 1999 for a 58% gain.
The coconut oil business continued to post volume gains with the year-to-date level posting a fourfold increase. Revenue for the quarter was P1.9 billion ($42 million) while operating income amounted to P52 million ($1.2 million) compared to last year's P15 million loss. Year-to-date revenue totaled P4.9 billion ($109 million), while operating income totaled P72 million ($1.6 million).
San Miguel Packaging Products (SMPP) sustained its strong performance in the third quarter with revenues growing by 24% to P3.7 billion ($82 million) and aggregate volume rising by 19%. Operating income for the quarter was at P499 million ($11 million), 68% higher than 1999. On a year-to-date basis, sales revenue amounted to P10.8 billion ($240 million), up 18%, while operating income of P1.6 billion ($36 million) was higher by 74%. The highest operating income performers were the glass business which posted a 107% increase and plastics with a 64% gain.
Tight cost management, market-driven product mix, increased efficiencies and lower-than-budget raw materials cost continue to bolster SMPP's overall profitability.
Founded in 1890, San Miguel is the largest food and beverage company listed in Southeast Asia and is active within the brewing and beverages, food and food-related, and packaging areas. San Miguel's ordinary shares trade on the Philippine Stock Exchange and trade in ADR form in the US (each ADR is equal to ten SMC Class B common shares). Prices for the ADRs may be accessed on the NASD OTC Bulletin Board under the symbol SMGBY. Quotes for San Miguel ordinary shares may be accessed on Bloomberg under the symbol SMC/B PM and on the Reuter Equities 2000 Service under the symbol SMC.
(a) US dollar figures have been provided for reader convenience at the exchange rate of US$1 = P45.04.
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