Philippine conglomerate San Miguel Corp, the country’s biggest company by sales, posted a more than 50 percent rise in second-quarter net income, benefitting from its fast-expanding energy business at home and in Southeast Asia.
The results from the company, which is involved in refining, power, airlines, food and beverages businesses and whose revenues make up about 5 percent of the Philippines’ $200 billion gross domestic product, reflect a domestic economy that is resilient despite weakening global demand hurting the country’s exports.
San Miguel, which started operations in 1890 making beer, has capitalised on the country’s economic growth by diversifying. It now has a portfolio of more than 400 products.
The company posted on Monday a net profit of 5.6 billion pesos ($133.7 million) for April-June compared to the previous period’s 3.7 billion pesos, according to Reuters’ calculations from its first-half results.
There were no quarterly profit estimates available but analysts expected San Miguel to post a 65 percent rise in net income to 19.3 billion pesos this year, according to Thomson Reuters I/B/E/S.
The company’s oil refining unit, Petron Corp, completed in March a $610 million acquisition of 65 percent of Esso Malaysia Berhad, 100 percent of ExxonMobil Malaysia Sdn Bhd, and 100 percent of ExxonMobil Borneo Sdn Bhd, giving it new oil refining capacity of about 88,000 barrels per day and control of 560 retail stations.
Fuel and refining is now the biggest business segment for San Miguel, accounting for about 60 percent of its total first-half revenue of 330 billion pesos. Its food and power business were also major contributors to revenue during the period.
In April it bought shares worth $500 million in flag carrier Philippine Airlines and a sister airline, adding to a string of acquisitions and investments worth more than $5 billion over the past four years.
San Miguel recently forecast 2013 revenue to climb to $24 billion from a projected $20 billion this year and has said it might make more acquisitions in the near term.
The conglomerate’s flagship firm, San Miguel Brewery, part-owned by Japan’s Kirin Holdings, had net sales of 37 billion pesos in the first half, up 4 percent from the previous year. The company did not provide net profit details.
The Philippine economy grew at an annual pace of 6.4 percent in the first quarter, powered by government spending and domestic demand. In a Reuters interview in July, Philippine President Benigno Aquino said second-quarter growth may be even faster.
San Miguel also launched on Monday its offer of up to 1.067 billion preferred shares at 75 pesos per share, the biggest-ever share sale by a local firm.
The company seeks to raise as much as 80 billion pesos from the primary offer to refinance costly preferred shares worth 72.8 billion pesos issued in 2009.
Shares in San Miguel, which has a market value of around $6.4 billion, the country’s seventh biggest, fell 0.8 percent on Monday in a broad market that was up 0.2 percent. The shares have fallen about 4 percent this year, underperforming the broader market’s 20 percent gain.