Saturday, 13 March 2010

Profits of San Miguel food unit jump to P2.7B

Neil Jerome C. Morales

THE FOOD subsidiary of diversified San Miguel Corp. bucked last year’s financial crisis as profits ballooned to P2.7 billion on the back of lower input costs and efficiency.

San Miguel Pure Foods Company, Inc. is looking at booking more than P5 billion from the sale of shares, company officials said on Friday.

"Against a climate of slower economic growth and sluggish market, San Miguel Pure Foods Co., Inc. posted a record-breaking performance for 2009, registering a 17-fold increase in net income from P149 million in 2008," the firm said in a statement.

San Miguel Pure Foods President Francisco S. Alejo III told reporters the gains were due to "lower [cost of] inputs and raw materials. We were also able to increase our distribution."
Revenues hit a record P75 billion, up by 6% year-on-year, while income from operations rose by 152% to P4.6 billion from P1.8 billion last year.

The poultry, feeds and flour businesses took advantage of stable pricing and soft prices of raw materials.

San Miguel Pure Foods had set P5.3 billion in investments for the next few years, out of which P1.5 billion was spent in 2009. "We are very optimistic about this year. The first two months already indicated a good year. We think that is going to continue," Mr. Alejo said.

In a special stockholders meeting Friday, shareholders approved the de-classification if San Miguel Pure Food’s class "A" and "B" shares and the increase in authorized capital stock by P1 billion to P2.46 billion. "The declassification will facilitate a broader investor base and greater public participation in the company," Mr. Alejo told the shareholders.

To date, only 0.1%. of the firm is held by the public. San Miguel Pure Foods Chief Finance Officer Zenaida M. Postrado said more than P5 billion would be raised from the sale of 75 million shares within the year.

Also yesterday, San Miguel Pure Foods declared an 18% stock dividend.

San Miguel Pure Foods has tapped J.P. Morgan as financial adviser.

Class "A" shares in San Miguel Pure Foods were last traded on Jan. 7 at P55.00 each while "B" shares were last traded on May 26, 2005 at P74.50.

Meanwhile, parent firm San Miguel Corp., Southeast Asia’s largest food and beverage conglomerate, will continue diversifying this year.

"We will stick to what we said before. We will concentrate on mining, infrastructure, power generation and energy," San Miguel Chairman Eduardo M. Cojuangco, Jr. told reporters.
San Miguel has diversified from slow but stable core businesses of food and beverage into high growth sectors like power, infrastructure and telecommunications.

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