San Miguel’s Income Falls By 5% | Marvin Germo

San Miguel’s Income Falls By 5%

By: Marvin Germo | August 9, 2019

Profit Decline In First Half

The second quarter marked the first half of the year for different companies. The same applies to San Miguel Corporation (SMC), the well-known conglomerate company that’s now paving its way to be as diversified as it can be. During the first half of 2019, the firm reported a decline billion. This is much lower compared to the P27.59 billion net income it posted last year during the same period. This followed an increase in net sales, which is 2% or equivalent to P509.5 billion. Every drop or grow in profit has a story behind. Let’s see what affected SMC’s earning for the 2 quarters that have passed.

Catch me in my live training events! (quick plug)

The heart of why I do these seminars is I want to build a generation of Filipinos with the right foundation in stock investing.  I want to bring smart investing to every Filipino around the world! If you would like to know more about how you could time the market check out the trainings below.

Stock Smarts Hong Kong – August 11, 2019

ICON Iloilo – August 17, 2019
Stock Smarts UAE – August 30 – September 3, 2019
Stock Smarts Qatar —  October 3 – 6, 2019
Stock Smarts Taiwan – November 2, 2019

Sluggish Performance Of Petron Corporation

The drop in net income of SMC can be attributed to the flat revenue and sluggish performance of Petron Corporation. The firm noted that Petron weighed by weak refining margins and prevailing movements in the prices of crude oil in the world. The consolidated operating income went down by 14% or P57.6 billion because of this. Petron’s net income dropped by 72% or P2.62 billion and net sales by 7% to P254.81 billion because of the closure of its Bataan refinery that is set for maintenance and major repairs after the earthquake that hit the province last April 2019. Petron is considered as a huge contributor to the slow performance of SMC after 2 quarters.

SMC’s Business Performances

Aside from Petron Corp., it can also be noted that some of the business segments of SMC recorded a drop in their profit. San Miguel Food and Beverage (SMFB) reported a growth in net sales, which is 10% to P151.11 billion but because the business incurred higher costs, the net income was dragged by 5% to P14.67 billion. The food business of SMC, the San Miguel Pure Foods, has a decrease in net income by 85% to P447 million although the sales were up by 5% or P66.13 billion. While it is a challenging track for SMC’s food and oil segments, Ginebra San Miguel Inc. and San Miguel Brewery, Inc. helped counterbalance the slow growth as it noted a 94% and 12% climbed in net income or P980 million and P13.26 billion respectively.

Power and Infrastructure Business

Meanwhile, the power business of SMC, through SMC Global Power Holdings, recorded a 288% increase in earnings or equivalent to P7.26 billion. The consolidated off-take volume jumped by 28% to 14,635 gigawatt-hours. This is primarily because of the new bilateral contracts from the extra power made by Limay, Malita, and Masinloc power plants and improved plant capacity in Ilijan, and Sual. The infrastructure business, on the other hand, marked a slide in its operating income by 3% or P6.03 billion in figures. This was amide the recorded flat sales of P12.32 billion. The vehicular traffic volume became better by 6% across its toll roads in TPLEX, SLEX, and Metro Manila Skyway.

I’m excited to share my 5th book overall and the 4th book in the Stock Smarts series, Stock Smarts: Breaking the Resistance – How to time your traders perfectly. The heart of this book is to teach you strategic ways on how to come in and buy and sell stocks in a way where you come as the market is headed up and come out as the market is headed down. The book is now out and exclusive via Marvin Germo Book Orders.
For more details and to order my other books: Marvin Germo Book Orders
Stock Smarts Book