H1 challenging for SMC
San Miguel Corp. was in the red for the first half of the year, posting a P4-billion loss compared to a P26.15-billion profit in the same period the prior year.
Revenues stood at P35.8 billion, down 31 percent from the prior year’s P509.5 billion.
Ramon Ang, San Miguel president, described the first semester as a “particularly challenging” period for the business sector.
Ang said the full impact of the pandemic “virtually shut all economic activity in the country from mid-March to mid-May,” limiting growth for the company.
“But we are seeing strong indications of a recovery for San Miguel businesses, and we remain focused and determined to build on these gains. Government reopening the economy, and allowing businesses to operate under strict health and safety protocols, was a very good call. Given that we’re still in a pandemic, saving lives is still our priority. As such, we fully support the new modified enhanced community quarantine (MECQ) in support of our medical front liners,” Ang said.
Ang said two of San Miguel’s business were hit the hardest — San Miguel Brewery Inc. and Petron Corp.
“The implementation of the enhanced community quarantine (ECQ) in mid-March did not help San Miguel Brewery’s operations which was already reeling from the effects of higher excise taxes,” Ang said.
“Consolidated revenues as a result dropped 39 percent to P42.8 billion. Operating income slid 61 percent to P7.4 billion, compared to the same period last year,” he added.
San Miguel Brewery closed the first half with a profit of P5.02 billion, down 62 percent from P13.26 billion last year.
Petron continued to face difficulties throughout the first six months of the year, as global crude prices remained volatile. This was compounded by the decline in demand during the second quarter when the ECQ was in place. Refining margins also remained weak in the region as oil consumption declined.
Petron posted a loss of P14.2 billion for the period, compared to a P2.6 billion profit in 2019. Sales reached P152.4 billion, down 40 percent from P254.8 billion last year.
Petron’s sales volumes from its Philippine and Malaysian operations fell 19 percent to 41.9 million barrels from 51.9 million barrels a year ago, amidst a sharp decline in fuel demand due to the pandemic.
Ang said Petron suffered inventory losses of nearly P15 billion for the period, though the recent stability in crude prices in July is seen to provide an estimated P3.5 billion in inventory gain for the company by the second half of the year.
“Petron continues to improve its productivity and reduce expenses to cope with COVID-19’s impact. Cash preservation initiatives have also been initiated. With crude prices stabilizing on the back of improving demand, some recovery in refining margins are expected moving forward,” said Ang who is also Petron president.
San Miguel Food and Beverage Inc. — where San Miguel Brewery is folded into — posted profit of P7.34 billion, down 50 percent from P14.67 billion last year, over topline of P122.82 billion, down 19 percent from P151.11 billion last year.
San Miguel’s packaging group recorded income from operation of P318 million, down 81 percent from P1.7 billion in 2019, over sales of 14.51 billion, down 19 percent from P17.84 billion.
SM Global Power Holdings Corp. recorded a profit of P9.06 billion, up 25 percent from P7.26 billion, over sales of P57.18 billion, down 21 percent from P72.51 billion.
SMC Infrastructure Inc. posted income from operations of P951 million, down 84 percent from P6.03 billion, over sales of P6.67 billion, down 46 percent from P12.31 billion last year.
GDP contraction worries PLDT
Despite the pandemic, PLDT Inc. managed to grow its profit and service revenues in the first half of the year versus the same period last year driven by sustained growth in data services.
But the second half outlook remains uncertain given the economic contraction’s possible impact on consumer spending on telco products.
PLDT said in the first half, its net income went up 1 percent to P12.3 billion while telco core was up 5 percent to P13.5 billion .
Service revenues grew 8 percent to P82.8 billion in the first half versus P76.6 billion last year. Of the total revenue, bulk came from individual segment which grew 16 percent to P39.8 billion, home segment grew 7 percent to P19.6 billion and enterprise segment also increased by 5 percent to P20.3 billion.
Manuel Pangilinan, PLDT chairman and chief executive officer, said despite the challenging times, the company is hopeful it can maintain a bottomline this year similar to 2019.
Pangilinan said the economic contraction may impact the company’s second half revenue.
“The 16.5 percent contraction is worrisome… How will the third and fourth quarter behave moving forward, will it impact people’s ability to spend on telco products?” he said.
PLDT is on track to spend P70 billion in capital expenditure this year which is lower than the initial budget guidance of P83 billion.
“Given that our network rollout efforts have regained momentum, we are levelling
up our target capital expenditures for 2020 back up to about P70 billion. The
balance of our original P83 billion capex budget will be spent next year,” Pangilinan said.
In response, to government calls to improve their network by year-end, Pangilinan assured the nationwide network coverage of PLDT and its wireless unit Smart Communication Inc. will improve from current 95 percent to 96 percent by yearend.
PLDT’s minimum interest speed will improve from 22 megabits per second (mbps) to 30 mbps by yearend, the company said.
8990 sustains growth in Q1
8990 Holdings Inc. in the first quarter sustained a double-digit topline growth of 15 percent year-on-year after posting P3.5 billion in revenues for the period.
Total housing units delivered was at 2,291 units, up 4 percent year on year.
Gross profit for the first three months was P1.9 billion, 15 percent higher than last year.
The company’s gross margin remained stable at 55 percent as it actively monitors and controls spending, manages labor costs, and locks in material costs to preserve margins from potential cost escalation.
Net income for the period grew 12 percent year on year to P1.3 billion with a margin of 38 percent.
Sales reservations grew 48 percent year on year to 3,457 units in the first quarter.
Fifteen projects nationwide are expected to contribute to the Company’s topline by the end of the year. Its first flagship project in Metro Manila, Urban Deca Homes Manila, is forecasted to bring in half of the total revenues for the year.