Losses in the foreign exchange market, the CREATE law reduces SMC’s profit for the first half of the year

Conglomerate San Miguel Corp. (SMC) said its first-half revenue fell 33% to 19.8 billion pesos from 29.57 billion pesos last year, partly as a result of foreign exchange losses and the CREATE Act.

Regular income, which excludes foreign exchange losses and the CREATE Act or the Corporate Recovery and Business Tax Relief Act, rose 24% to 32.48 billion pesos from 26.09 billion pesos last year.

Consolidated sales revenue rose 73% to 711.4 billion pesos from a previous figure of 410.12 billion pesos, driven by strong volume growth and improved selling prices.

The company’s operating profit rose 41% to 85.85 billion pesos from 61.01 billion pesos last year, mainly due to an improvement in the performance of its oil and fuel subsidiary Petron Corp. and sustainable recovery of its food, beverage, packaging and infrastructure businesses.

“Overall, it has been a very challenging period where geopolitical conflict has led to uncertainty and major supply and cost issues affecting industries worldwide. Despite this, and even with the ongoing effects of the pandemic, we are encouraged by the strong and growing demand for our products and services, as evidenced by our higher volumes and revenues in the first half of the year,” said San Miguel President and CEO Ramón. S. Eng.

“This indicates that the recovery and growth of the economy of our country is gaining momentum. We will take every opportunity to further improve our performance in the second half.”

San Miguel Food and Beverage Inc. income increased by 12 percent to 10.65 billion pesos from 9.5 billion pesos last year due to higher volumes and better realized prices in the beer, spirits and food divisions.

Meanwhile, sales figures for SMC Global Power Holdings Corp. reached 14,336 gigawatt-hours during this period, up 6% from last year.

Consolidated revenue reached 102.6 billion pesos, up 70% from the previous figure of 60.27 billion pesos, driven by improved Meralco offerings and increased demand from distribution companies and disputed customers, as well as the start of commercial operation of the accumulation system energy on batteries Kabankalan with a capacity of 20 MW.

However, operating profit fell 26% to 12.76 billion pesos from 17.15 billion pesos last year due to unprecedented increases in fuel costs and downtime at the Ilijan gas plant due to supply problems at the Malampaya gas field.

Petron’s revenue doubled to 7.7 billion pesos from 3.87 billion pesos last year as consolidated volumes in the Philippines and Malaysia rose 34% to 51.4 million barrels amid a recovery in demand due to continued weakness travel restrictions and improving the pandemic situation.

Meanwhile, revenue from the company’s infrastructure division rose 58 percent to 13.4 pesos from a previous 8.48 billion pesos. Operating income more than doubled to 6 billion pesos from the previous 2.31 billion pesos due to increased traffic.