Philippines’ San Miguel H1 net jumps 72 pct, eyes new projects

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* Q2 net income 3.66 bln pesos, up 8 pct from yr ago
* Says oil refinery, power ventures fuel 168 pct revenue jump
* Company eyes new infrastructure, power ventures

Philippine food-to-power conglomerate San Miguel Corp’s first half net income jumped 72 percent as the power and oil refinery ventures it entered into in the last three years boosted group revenue.

San Miguel, the dominant food and beverage producer for decades before becoming the country’s biggest power player, said on Friday it was selling part of its stake in Manila Electric Co to its food arm San Miguel Pure Foods for 13 billion pesos ($305 million).

“We are continuously benefitting from our strategic shift to high-growth businesses,” company chairman Eduardo Cojuangco said in a statement. “We are confident we can bring in more value to our shareholders from the company’s ongoing diversification.”

The group would still pursue a public offering later this year for its power subsidiary SMC Global Power Holdings Corp, it said.

The results came after a volatile week for markets that saw the country’s main stock index fall to a near two-month low on Wednesday, before paring its losses later to end the week 2.6 percent lower.

On Thursday, San Miguel reiterated it would take part in the 1.6 billion pesos auction of an expressway venture, the first in the government’s list of priority projects.

San Miguel Corp reported net income of 10.8 billion pesos in the first half of 2011, up 72 percent from a year ago, on the back of a 168 percent jump in revenues fuelled mainly by its oil refinery unit Petron Corp and power ventures under SMC Global Power.

Petron and SMC Power together make up nearly two-thirds of the group’s revenue.


Its first-half results meant it reported net profit of 3.66 billion pesos in the second quarter, up about 8 percent from a year ago, given it had earlier reported January-to-March income of 7.14 billion pesos, based on Reuters’ calculations.

Year-ago results reflect strong earnings fuelled by spending related to the May 2010 presidential polls.

Analysts had expected San Miguel to post net income of 6.0 billion pesos in the second quarter, and 22.1 billion pesos for the entire year, up 10 percent from 2010.

Its flagship firm San Miguel Brewery , part owned by Japan’s Kirin Holdings , had operating income of 10.2 billion pesos in the first half, up 8 percent from a year earlier. The company did not provide net profit details.

San Miguel shares gained 1.6 percent on Friday in broader market up 0.2 percent .

The shares have lost more than a quarter of its value this year, compared with the market’s 2.6 percent gain, partly due to a selldown of its shares following its equity and debt sale in May in which the company offered shares at a steep discount to the market price. ($1 = 42.560 Philippine Pesos)