MANILA, Philippines – San Miguel Food and Beverage (SMFB) reported lower earnings for the 1st half of 2019, with consolidated net income declining by 5% to P14.7 billion, despite strong sales of its liquor and food businesses.

Revenues grew by 10% to P151 billion for the January to June period, driven mainly by volume expansion across key products.

However, SMFB said cost and pricing pressures from the food group weighed on margins.

Its food group reported revenues of P66.1 billion, 5% higher than the same period last year. SMFB did not indicate the net income of its food group.

SMFB said its poultry segment was negatively hit by the industry-wide oversupply that began late 2018.

The group is confident it will get out of the slump sooner than expected, as prices start to recover.

To ease pressure on margins, the group said it has been focusing on growing its value-added business, which resulted in double-digit growth for its prepared and packaged food segment, as well as top line growth across its processed meats, dairy, and spreads businesses.

“Despite challenges impacting some of our businesses, we remain positive about the company’s overall growth prospects given our unique position to capture the opportunities directly linked to our fast-growing economy,” SMFB president and chief executive officer Ramon Ang said. (READ: Meet Ramon Ang, Filipino billionaire and Duterte’s friend)

Its beer business delivered strong revenues at P70.3 billion, 12% higher year-on-year as Filipinos consumed more of its leading brands like Red Horse and San Miguel Pale Pilsen. Beer domestic volumes grew by over 10%.

The spirits and liquor business exceeded expectations, as revenues soared by 20% to P14.7% during the 6-month period.

Volumes grew by 17%, bulk of which were driven by its flagship brand Ginebra San Miguel. – Rappler.com