SMFB income up 8% in H1 despite higher input costs

San Miguel Food and Beverage Inc. (SMFB) said its income in the first half grew 8 percent to P18.8 billion from last year’s P17.36 billion, as the company said it posted a record-breaking performance since its consolidation in 2018 despite higher prices and currency depreciation.

Consolidated revenues grew 17 percent to P172.1 billion from last year’s P146.79 billion, driven by gains in volume and pricing adjustment across the product portfolios of its beer, spirits and food divisions to mitigate the impacts of input cost increases.

“Our financial position and long-term fundamentals remain strong, notwithstanding current macroeconomic headwinds. We remain committed to delivering operational excellence and value to all our stakeholders, as well as good quality products for the everyday needs of all our consumers,” said Ramon S. Ang, SMFB president and CEO.

The company’s beer business, San Miguel Brewery Inc., reported consolidated revenues of P65 billion, 20 percent higher than last year on account of improved volumes and a price increase implemented in October last year. Income from operations jumped 22 percent to P14.7 billion.

The beer business, it said, implemented various campaigns in key channels after restrictions eased following the Covid-19 Omicron surge in January with more on-premise outlets reopening. As a result, its domestic operations reported volume improvement of 20 percent quarter-on-quarter, the company said.

Its international operations registered strong volume improvements, particularly in its Thailand, Indonesia and export units.

Meanwhile, revenues of the spirits business under Ginebra San Miguel Inc. jumped 14 percent to P23.1 billion, driven by a 9-percent increase in volumes and modest price increases. Strong thematic campaigns, consumer promotions, a broadening distribution network, and efficiencies all supported growth. Income from operations increased 25 percent to P3.3 billion.

San Miguel Food, meanwhile, also sustained its growth from the first quarter and registered consolidated revenues of P84 billion, a 16-percent increase over the prior year driven by strong volume growth in certain product categories and substantial price pass-ons to partly absorb increasing raw material costs.

Its animal nutrition and health and flour segments continued to post strong revenue growth, with both volumes and prices posting double-digit increases, while the prepared and packaged food business remained resilient with moderate growth in both volume and price.

Its poultry segment, meanwhile, was faced with supply challenges due to erratic weather conditions, constraining its ability to meet a surge in foodservice demand as on-premise dining bounced back strongly. The company said tight supply pulled up prices and shored up its performance.

Consolidated operating income reached P8.6 billion or a 3-percent improvement from last year.

“The food business has been actively working to drive its costs down by improving efficiencies, enhancing productivity, and maximizing utilization of its expansion facilities,” the company said, adding that the global macroeconomic outlook remains uncertain and the remainder of the year may continue to be challenging.

“SMFB will continue to implement various strategies and efficiencies to mitigate cost pressures and help protect profits.”