San Miguel Food and Beverage, Inc. (SMFB) registered consolidated revenues of P69.0 billion for the first quarter of the year, 9% lower than the same period last year as the impact of COVID-19 weighed on its performance in the latter part of the quarter.
Consolidated Operating income was likewise impacted by an increase in excise taxes for the Beer and Spirits Divisions in January of this year. As a result, consolidated operating income and consolidated net income both declined 20% to P8.6 billion and P5.8 billion, respectively.
While its Beer and Spirits Divisions started the year with good momentum, the declaration of the Enhanced Community Quarantine (ECQ), together with the imposition of liquor bans across key cities, negatively impacted sales of its alcoholic beverages. This was partially offset, however, by higher sales from the Food Division.
In the first quarter, the Food Division generated consolidated revenues of P33.2 billion, 2% higher than the same period last year.
While the Protein and Animal Nutrition business posted a 3% decline in revenues, there was a significant spike in sales of some food categories as consumers stocked up on essential supplies leading up to and during the ECQ period.
The Food Division managed to keep all the plants running and maintained the highest levels of safety and hygiene in all its premises. As a result, revenues of the Prepared and Packaged Food segment expanded by 16% with strong demand in the processed meats, dairy, spreads, biscuits, and coffee segments. Recovering from the widespread glut in 2019, the Protein and Animal Nutrition segment registered a positive operating income of P1.2 billion during the first quarter, a complete reversal from losses of P577 million last year.
The Beer Division posted consolidated revenues of P28.4 billion, 18% lower than the same period last year. Volumes for SMB were up single digits in the first two months of the year with March 2020 volumes experiencing a drop given the ECQ and the resulting liquor bans.
Similarly, the Spirits Division had a good start for the first two months of the year with sales volumes 15% higher than the same period last year, but ended the quarter 14% less year-over-year. First quarter revenues amounted to P7.5 billion, 10% lower than last year.
Nonetheless, SMFB has the solid financial foundation to weather the current situation, including a strong balance sheet, relatively light debt service obligations, and ample liquidity. The Company is, likewise, taking the appropriate steps to managing its expenses and capital expenditures moving forward.
SMFB continues to support communities across the Philippines with local relief efforts. Through the San Miguel Foundation, SMFB has donated canned goods, poultry, flour, Nutribuns, biscuits, and coffee, among others, to over 1.6 million families. It also converted its Spirits facilities to produce over 1.2 million liters of alcohol that were distributed to close to 4,000 hospitals nationwide.
SMFB has been a committed to helping the nation in supporting its projects as well as providing aid to the frontlines who are working tirelessly in serving the Filipino people.
“The road to recovery may be long. However, over the last 130 years, we successfully overcame many challenges. We remain confident that with our strong fundamentals and ability to deliver good and affordable products to our consumers, we will overcome this once again,” he added.
Photo Courtesy: Bilyonaryo.com, San Miguel Corporation,The Filipino Times,
