MANILA -- San Miguel, the Philippines' largest company by sales, said Thursday net income fell sharply in the first half, but recurring profit rose by a fifth, fuelled by oil and beer production.
Net profit slid 26% to 26.09 billion pesos ($514 million), mainly due to the absence of one-off gains from the sale of telecom assets, which boosted results last year, and partly due to foreign exchange losses amid the impact of a stronger U.S. dollar. Recurring net income rose 21% to 27.60 billion pesos.
The company diversified 10 years ago from its traditional food and beverage ventures into capital-intensive industries such as infrastructure, power, and oil refining, in order to boost sales. In the first half, net sales jumped 20% to 393.41 billion pesos, driven by almost all businesses units.
Petron, San Miguel's oil refining and distribution unit, reported a 56% profit increase to 8.21 billion pesos in the first half, on improved refinery production yields and sustained expansion of retail outlets in the Philippines and Malaysia.
Beer unit San Miguel Brewery, partly owned by Japan's Kirin Holdings, registered net income of 9.40 billion pesos, up 14% from a year ago, after aggressive marketing initiatives lifted sales by 12%.
Net income at San Miguel Pure Foods jumped 26% to 3.14 billion pesos, as net sales rose 5%, driven by poultry, meat, and agro-industrial products such as feeds, as well as expanded distribution channels.
Without disclosing net profit figures, San Miguel said operating income at its infrastructure arm rose 4% to 5.25 billion pesos, while its power unit recorded a 15% fall in operating income to 13.32 billion pesos. San Miguel did not disclose the reasons for the fall.
Shares in San Miguel added 0.10% to 101.60 pesos on Thursday, as Manila's benchmark index dropped 0.25%.