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San Miguel posts 55% income drop in 2020, banks on vaccines for recovery

Ralf Rivas
San Miguel posts 55% income drop in 2020, banks on vaccines for recovery

CONGLOMERATE. San Miguel Corporation's head office.

Photo from San Miguel Corporation

'There are still so many challenges ahead – and a lot of uncertainty. But we believe our economic recovery is underway as the vaccine rollout gathers pace,' says San Miguel president and COO Ramon Ang

San Miguel Corporation saw its profits plunge by almost 55% to P21.9 billion in 2020 from the P48.6 billion it earned in 2019, largely due to the economy’s contraction and COVID-19 quarantine restrictions.

The Ramon Ang-led conglomerate, however, noted a strong bounce back in the 2nd half of the year, posting P25.9 billion in net income during the period, which is 7 times better than its 1st half results and 15% higher than the same period in 2019.

However, 1st half losses, amounting to P4 billion, dragged down the annual figure.

Sales and margin improvements in the 2nd half reduced the overall decline in consolidated revenues and operating income for the full year, which ended at P725.8 billion and P71.5 billion, 29% and 38% lower than the previous year, respectively.

“While it has not been a good year for all businesses and our economy overall, we’re encouraged by the sustained recoveries that our businesses showed in the 2nd half,” San Miguel president and chief operating officer Ramon Ang said.

“There are still so many challenges ahead – and a lot of uncertainty. But we believe our economic recovery is underway as the vaccine rollout gathers pace.” (READ: San Miguel spending P1 billion for employees’ COVID-19 vaccinations)

Here’s how the conglomerate’s businesses performed in 2020:

San Miguel Food and Beverage – Its net income ended at P22.4 billion, lower by 31%.

It posted consolidated revenues of P279.3 billion for the full year, 10% lower than in 2019, but narrowed its 19% decline in the 1st half.

This was driven by volume improvements in the 2nd half from its beer business, all-time high volumes of the spirits division, which surpassed pre-pandemic figures, and the steady growth of its food unit’s prepared and packaged foods segment throughout the year.

San Miguel Brewery – It ended 2020 with consolidated revenues of P107.9 billion. Volumes recovered starting in the 3rd quarter, with month-on-month improvements posted until year-end.

“Total volumes for the year reached 202 million cases – the result of the gradual easing of restrictions and lifting of liquor bans, coupled with consumption-generating programs and direct-to-consumer initiatives,” the company said.

Ginebra San Miguel – Net income reached P2.8 billion, 65% higher than in 2019 and the highest-ever recorded by the company.

The company reported strong consumption despite many establishments closing, with volumes reaching 38.6 million cases.

“Marketing promotions, thematic campaigns, coupled with the continued expansion of its distribution reach, helped drive growth. Total revenues reached P36.2 billion, up 25%, while operating income grew 32% to P3.8 billion.”

Petron Corporation – It suffered a net loss of P11.4 billion.

But it noted a turnaround during the 2nd half, posting a net income of P4 billion during the period, as world crude prices stabilized.

However, it was not enough to lift earnings, as 1st half losses were significantly higher.

Consolidated revenues settled at P286 billion, down by 44%.

SMC Global Power – It posted full-year off-take volumes of 26,116 gigawatt hours, translating to P115 billion in consolidated revenues, 15% lower than in 2019. 

Operating income grew 3% to P36.9 billion, while net income amounted to P18.9 billion.

SMC Infrastructure – Its operating income amounted to P2.6 billion, while revenues stood at P14.6 billion.

Revenues dipped by 38%, mainly due to the decline in traffic volumes where it operates toll roads. – Rappler.com

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author

Ralf Rivas

A sociologist by heart, a journalist by profession. Ralf is Rappler's business reporter, covering macroeconomy, government finance, companies, and agriculture.