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Philippines. San Miguel Brewery sees strong profits

San Miguel Brewery, Inc. (SMB) could book P12 billion to P15 billion in net income by the yearend, with the company already netting P4 billion during the first quarter, its chairman said.

“I think SMB is doing very well [because] for the first quarter alone, net income is P4 billion. And that’s not the peak season yet, usually Christmas season and summer,” its Chairman Ramon S. Ang told reporters after a stockholders’ meeting in Pasig City on Monday.

The beer subsidiary of San Miguel Corp. managed to grow its net income by 23% from the P3.3 billion posted a year earlier, as new campaigns further boost consumption of its products.

The company’s revenues rose 23% to P23.3 billion, while sales increased 25% to P20.3 billion, following a 25% growth in volume to 51 million cases.

“In the Philippines, the company introduced new campaigns backed by consumer and trade programs to strengthen market leadership and further generate consumption,” SMB noted in a statement.

Net income from the company’s Philippine operations alone jumped 18% to P3.8 billion in the first quarter of the year.

SMB also registered improved results in 2015. The company posted a net income of P13.5 billion, after increasing its consolidated revenues by 4% to P82.4 billion and operating income by 3% to P22.6 billion.

When asked about expansion plans for the beer business, Mr. Ang said: “The beer business does not need too much expansion or what. It’s already doing very very well.”

Ang is bullish about its premium beer and non-alcohol beverage business this year.

“We have 97-percent market share… In fact, our SMB premium beer is doing very, very well. Even in international market, our SMB premium is doing very, very well. We are in every segment,” he said.

Mr. Ang also downplayed the recently announced joint venture of rival Asia Brewery, Inc. and Heineken International B.V. for the local production of the latter’s products.

“In the beer business side, SMB does not need to do anything. We have been competing with every major beer maker in the world, none of them were successful in competing with us in the Philippines,” he said.

SMB is also expected to continue turning profits amid the liquor ban proposed by president-elect Rodrigo R. Duterte.

“Liquor ban is nothing new for us. Our volume in Davao is not affected at all. The liquor ban is up to 1 a.m. or 2 a.m., it has no effect on us,” Mr. Ang said.

1 Jun. 2016

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