Philippine food and beverage group San Miguel Corporation is expected to report lower net profits than hoped for in 2001 as the effect of acquisitions on interest income from its cash kicks in.

San Miguel recorded a net profit of 7.5 billion pesos in 2000 but when non-recurring income of PHP670 million from the redemption of a unit's preferred shares was excluded, its net profit dwindled to PHP6.84 billion. Many analysts say the company will be hard pressed to match even that figure in 2001.

San Miguel is expected to release its full-year results within the next two weeks.

As a result of a number of acquisitions, including a share in Coca-Cola Amatil, the company's cash balance, which had been growing due to a number of divestments, has fallen.

San Miguel had been using interest income generated from its cash hoard to service its considerable debts. But in the first nine months of last year its net interest expenses leapt to PHP1.5 billion from PHP552 million.

Nonetheless, analysts still believe San Miguel will meet a expectations for sales of around PHP125 billion.