Thursday, 5 November 2009

SMC reports P57-B profit in first 9 months, up 172%

Manila Bulletin

Diversifying conglomerate San Miguel Corporation reported a recurring net income (before one-time gains) growth of 6 percent to P7.61 billion from the P7.13 billion recurring profits from the same period in 2008.

The firm said in a disclosure to the Philippine Stock Exchange that strong first nine months results were driven by the sustained growth of its beer and liquor units, along with higher productivity and continuing cost discipline across all businesses.

Net income as of September 2009 reached P57 billion, 172 percent more than the P20.9 billion profit in the same period last year.

One-off items this year include gain from the sale of SMC’s 43.25 percent stake in domestic beer of P50.7 billion which was used to prepay the SMC’s debt of $923 million or P44 billion, and the gain from discontinued operations of J. Boag in 2008 of P5.7 billion Net income last year included gains from the initial public offering of beer unit San Miguel Brewery Inc. and sale of other assets.

SMC said consolidated revenues grew 4 percent to P126.5 billion in the first nine months of 2009 while operating income ended the period at 12 percent higher at P13.1 billion.

Volume improvements combined with cost management and stable raw material prices boosted San Miguel Brewery’s performance after a difficult first three months for the Company’s beer unit.

SMB Inc. revenues and operating income were both up 5 percent in January-September to P37 billion and P11.3 billion, respectively.

SMC is planning to raise P17 billion from the private placement of its Series 1 Preferred Shares to beef up its warchest after issuing P65.49 billion worth of it in exchange for common shares accounting for 27.63 percent of its capital. The firm said its board has approved the issuance, through private placement, of up to 226.8 million Series 1 Preferred Shares.

The proceeds from the issuance will be used to finance investments and acquisitions of SMC. The SMC board has authorized Management to determine the issue price and dividend rate of said preferred shares.

SMC president Ramon S. Ang said the principal reasons given by shareholders for availing of the earlier Exchange Offer were the higher face value of the preferred shares of P75.00 per share versus the market price of the common shares when the exchange was first announced.

The preferred shares also promise a higher dividend rate of 8 percent per annum, which translates to P6.00 per share per annum versus the common dividend of P1.40 per share given in the past many years.

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