By Madelaine B. Miraflor
Chemical trading company SBS Philippines Corporation has delivered higher net income of P175.6 million in 2018 from P101.3 million from the prior year amid its diversification program that started two years ago.
In a filing with the Philippine Stock Exchange (PSE), SBS disclosed that its net income went up by 73 percent on the back of the significant gain it had from its "investment in affiliate companies in line with its diversification program initiated in 2016."
For the full year, SBS reported gross revenue of P1.17 billion from its core chemical business and property related investments, while its net sales last year ended at P1.17 billion, up 6.6 percent compared to the previous year.
The company's sales from core chemical business grew by 6.3 percent to P1.1 billion from P1 billion in 2017 driven by higher volume sales of raw material ingredients for feeds, and industrial chemicals.
The company’s sales to the key product segments of feed, veterinary and agriculture inputs; Industrial raw materials; food ingredients; pharmaceutical and cosmetics products accounted for 35 percent, 27 percent, 27 percent and 11 percent, respectively, of its total sales revenues.
SBS pointed out that its strong sales performance during the first half of 2018 was dampened by increased competitive pressures on food ingredients products and the slowdown in industrial production activities during the fourth quarter of 2018.
Nevertheless, its gross profit went up from P289.6 million posted in 2017 to P322.8 million in 2018 as result of its product portfolio rebalancing and further improvement in its sourcing capability.
"The Group continues to introduce new product offerings that present best value alternatives to improve efficiencies and productivity in the industry segments it served. It has also introduced a range of water proofing chemical materials for the construction and infrastructure market in 2018 to serve this fast growing segment," SBS told the exchange.
In 2018, the group intensified its investments in property related assets and provides management services to its affiliates.
Through its subsidiary, SBS Holdings, and several associate companies, the group has built significant property assets strategically located in Metro Manila and nearby provinces, suitable for high-rise commercial and residential development.
"The strategy of taking small ownership stake in companies investing in real properties allowed the Group to attain a more diversified interests in different property holdings at a lower capital requirement and risk exposure," SBS said, adding that the move has contributed to the group about P97.5 million of equity net income of the associate companies.