San Miguel Food and Beverage Inc. (SMFB), the food and drinks arm of San Miguel Corp., reported a two percent increase in first-quarter net income as growth in its food and spirits units offset a flat performance in its core beer business.

Net income rose to ₱11.8 billion in the three months through March from a year earlier, the company said in a statement. Revenue increased four percent to ₱103.1 billion, while operating income climbed three percent to ₱15.7 billion.

Earnings before interest, taxes, depreciation, and amortization rose four percent to ₱20.4 billion, keeping the SMFB’s operating margin steady at 20 percent.

The food and beverage giant is navigating an increasingly volatile operating environment marked by geopolitical tensions and fluctuating fuel costs. To counter these headwinds, the company is relying on price increases and strict cost controls.

“We cannot control how global conditions will evolve, but we can control how prepared we are,” San Miguel Food and Beverage Chairman Ramon S. Ang said.

He added that the company will remain disciplined on costs while continuing to invest in its supply chain to ensure stable food supply.

The company's food division was the strongest performer during the quarter, with revenue rising seven percent to ₱49.6 billion, driven by its animal feeds segment and steady demand for branded products such as dairy, coffee, and processed meats. The unit’s operating income jumped 10% to ₱4.9 billion, while net income rose eight percentto ₱3.3 billion.

In contrast, the flagship beer business saw growth stall, with total revenue flat at ₱36.8 billion. Domestic beer sales, which accounted for the bulk of the division's business, reached ₱32.7 billion.

San Miguel said domestic performance was supported by price hikes implemented to mitigate volume pressure and higher excise taxes. Operating income for the beer unit was flat at ₱7.9 billion, while net income stood at ₱6.2 billion. The company’s international beer operations generated ₱1.68 billion in revenue, face headwinds from the conflict in the Middle East which disrupted export volumes.

Meanwhile, the spirits business, which produces Ginebra San Miguel, posted a three percent increase in revenue to ₱16.7 billion. Operating income for the hard liquor segment reached ₱2.8 billion, while net income was ₱2.3 billion, aided by marketing campaigns and cost-cutting measures. (James A. Loyola)