San Miguel Food and Beverage, Inc. (SMFB) reported a record-breaking first half performance, posting its highest level of revenue and profitability since its consolidation in 2018.

In a disclosure to the Philippine Stock Exchange, the firm said this was achieved despite the challenges of high inflation, rising fuel and raw material input prices, and currency depreciation.

Consolidated net income improved 8 percent from the same period last year to P18.8 billion in the first half of 2022 while consolidated revenues grew 17 percent to P172.1 billion.

This was driven by gains in volume and pricing adjustment across the product portfolios of its beer, spirits, and food divisions in order to mitigate the impacts of input cost increases.

“Our financial position and long-term fundamentals remain strong, notwithstanding current macroeconomic headwinds,” said SMFB President and CEO Ramon S. Ang.

He added that, “We remain committed to delivering operational excellence and value to all our stakeholders, as well as good quality products for the everyday needs of all our consumers.”

SMFB’s beer business reported consolidated revenues of P65.0 billion, 20 percent higher than last year on account of improved volumes and a price increase implemented in October last year.

As restrictions eased following the COVID-19 Omicron surge in January with more on-premise outlets reopening, domestic operations reported a marked volume improvement of 20 percent quarter-on-quarter.

Likewise, beer’s international operations registered strong volume improvements, particularly in its Thailand, Indonesia, and Export operations.

During the period, the beer business generated EBITDA of P17.2 billion, 16 percent higher than the same period last year, while income from operations jumped 22 percent to P14.7 billion.

Meanwhile, the spirits business continued its momentum as revenues jumped 14 percent year-on-year to P23.1 billion, driven by a 9 percent increase in volumes and modest price increases.

EBITDA of the spirits business rose 17 percent to P3.6 billion, while income from operations increased 25 percent to P3.3 billion.

SMFB's food business sustained its growth from the first quarter and registered consolidated revenues of P84.0 billion, a 16 percent increase over the prior year driven by strong volume growth in certain product categories and substantial price pass-ons to partly absorb increasing raw material costs.

Animal nutrition and health and flour segments continued to post strong revenue growth, with both volumes and prices posting double-digit increases, while the Prepared and Packaged Food business remained resilient with moderate growth in both volume and price.

Its poultry segment, meanwhile, was faced with supply challenges due to erratic weather conditions, constraining its ability to meet a surge in foodservice demand as on-premise dining bounced back strongly. Nevertheless, tight supply pulled up prices and shored up topline performance.

Consolidated EBITDA for food business amounted to P11.7 billion, 2 percent higher year-on-year, while consolidated operating income ended at P8.6 billion or a 3 percent improvement.

While the global macroeconomic outlook remains uncertain and the remainder of the year may continue to be challenging, SMFB said it will continue to implement various strategies and efficiencies to mitigate cost pressures and help protect profits.