San Miguel Food and Beverage, Inc. reported a 5 percent decline in consolidated net income to P9.2 billion in the first quarter of 2022 from P9.7 billion in the same period last year.
However, the firm said in a statement that, excluding non-recurring benefits in the first quarter of 2021 related to the CREATE law, the company’s net income for the quarter in review was slightly up by 1 percent to P9.2 billion.
SMFB said it delivered solid top-line results in the first quarter despite sharp increases in raw material costs and disruptions to supply chains brought about by the prolonged conflict in Ukraine that is pushing up prices of global commodities.
Consolidated revenues grew 9 percent compared to the first quarter in 2021 to P83.1 billion, driven by a combination of volume growth and better pricing across multiple categories in its beer, spirits, and food businesses.
This, even as the COVID-19 Omicron variant interrupted an already improving trend in the latter part of last year.
As with other consumer goods companies, SMFB said it was faced with rising input costs on raw materials and utilities, squeezing profits and muting the gains from volume growth compared with the same period last year.
However, consolidated EBITDA and consolidated income from operations still managed to grow by 1 percent to P15.7 billion and P12.7 billion, respectively.
SMFB's Food business posted consolidated revenues of P40.8 billion, a 13 percent increase over the prior year as demand for its brands remained robust.
Its Animal Nutrition and Health and Flour segments posted strong double-digit revenue growth, while Poultry and Processed Meats also posted higher sales.
Advertising and promotional campaigns, expansion of distribution networks, superior product quality, and better pricing all contributed to the growth of the Food business.
While the Food business continues to take the necessary actions to maintain profitability, it was still impacted by inflationary pressures.
Its consolidated EBITDA for the first quarter of the year amounted to P5.7 billion from P6.1 billion, while consolidated operating income ended at P4.2 billion from P4.5 billion.
The Beer business, on the other hand, reported revenues of P29.7 billion, 3 percent higher than the prior year on account of improved volumes in its international operations and price adjustments.
Its EBITDA and income from operations remained flat in the first quarter at P8.0 billion and P6.8 billion, respectively.
Meanwhile, SMFB’s Spirits business continued its momentum as revenues jumped 11 percent year-on-year to P12.6 billion. Strong thematic campaigns, consumer promotions, a broadening distribution network, and efficiencies all supported growth.
EBITDA of the Spirits business rose 32 percent to P2.0 billion from P1.5 billion, while income from operations increased 39 percent to P1.8 billion from P1.3 billion.
“We remain optimistic and steadfast in pursuing strategies that will drive long-term value for our shareholders. As the market continues to be dynamic, we will continue to manage the inflationary environment with the same level of discipline that carried us through the years,” said SMFB President and CEO Ramon S. Ang.