San Miguel to sell 20% stake in F&B unit while posting higher half-year results

By Lester Wan contact

- Last updated on GMT

The move to sell a 20% stake in San Miguel Food and Beverages Inc (SMFB) was one of the requirements of the merger of SMC’s previous food and beverage units.
The move to sell a 20% stake in San Miguel Food and Beverages Inc (SMFB) was one of the requirements of the merger of SMC’s previous food and beverage units.

Related tags: Philippines, San miguel corp

Philippine conglomerate San Miguel revealed that it is preparing to sell a 20% stake in its food and beverage business unit, valued at around $1.7bn, on the same day it posted promising half-year figures.

In a notice to the Disclosure Department of the Philippine Stock Exchange (PSE), San Miguel Corporation (SMC) stated: “We advise that, at the regular meeting of the board of directors of San Miguel Corporation held today, August 9, 2018, the board of directors of the Corporation approved the sale of up to 1.2 billion common shares of San Miguel Food and Beverages Inc. (SMFB) through a public offering.”

“The terms and conditions of the public offering, including the final issue price, the issue size, the over-allotment option, the cornerstone and anchor investor process, the engagement of legal and financial advisors, and the appointment of the stabilizing agent and underwriters as may be necessary have been delegated to management and will be subject to further disclosures of the company and SMFB,” ​said Ferdinand Constantino, corporate information officer of SMC, in the notice.

This move would make it the country’s biggest ever equity offering. It is meant to formalise the firm’s follow-on offering and comply with the minimum public ownership rule, which was one of the requirements of the merger of SMC’s food and beverage units.

We had previously reported on San Miguel having merged its food and beverage businesses under one company​.

Rising revenues

Meanwhile, SMC reported a 29% increase in recurring net income to PHP 35.5bn for the first six months of 2018 as consolidated revenues reached PHP 499bn, 27% higher than the same period last year.

SMC said growth was mainly driven by higher volumes and favourable selling prices, while all its major businesses in food and beverage, power, fuel and oil, and infrastructure “sustained their respective growth momentum”​.

“Increased business focus and a lot of hard work were key to our group’s stellar performance. We’re encouraged by the results we’ve had so far, and are very hopeful that this momentum will carry through for the rest of the year,” ​said Ramon S. Ang, president and COO of SMC.

Food and beverage fare well

Combined sales revenues of SMFB for the first half totalled PHP 137.4bn, 15% higher than last year. Similarly, the operating income and net income of PHP 22.9bn and PHP 15.4bn both grew 20% from the same period last year.

Likewise, San Miguel Brewery Inc. continued its “solid performance” ​posting strong volumes mainly driven by increased consumption of its beer products nationwide, and boosted by the implementation of new campaigns and consumer and trade programmes that continued to further strengthen the equity of San Miguel Brewery brands. The revenue of PHP 62.5bn grew 18% higher from last year, while the net income of PHP 11.8bn grew 26%.

San Miguel Food Group’s consolidated revenues for the first half of the year reached PHP 62.9bn, 12% higher than last year. This was mainly driven by the strong performance of agro-industrial and branded value-added businesses.

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