San Miguel bleeds P4 billion due to COVID-19 pandemic

Diversified conglomerate San Miguel Corporation (SMC) suffered a financial beating in the first half of 2020 amid COVID-19’s spread.

The full impact of the pandemic that virtually shut all economic activity in the country from mid-March to mid-May limited growth and reflected on the company’s first half performance, according to SMC.

The company ended the first semester with a net loss of P4 billion, a reversal from a net income of P26.15 billion in the same period in 2019.

Consolidated revenues stood at P352.8 billion, down 31% while consolidated operating income declined by 74% at P14.9 billion. 

“The first half was particularly challenging for most in the business sector but we are seeing strong indications of a recovery for SMC businesses, and we remain focused and determined to build on these gains,” SMC president and COO Ramon Ang said.

“Government reopening the economy, and allowing businesses to operate under strict health and safety protocols, was a very good call. Given that we’re still in a pandemic, saving lives is still our priority. As such, we fully support the new Modified Enhanced Community Quarantine (MECQ) in support of our medical front liners,” he added.

Ang noted that with the recent reimposition of restrictions, the company is prepared to execute on its plans and support government initiatives to the fullest to help the country recover.

President Rodrigo Duterte placed Metro Manila, Laguna, Cavite, Rizal, and Bulacan under MECQ from August 4 to 18 following pleas from the medical community for a “time out” amid rising COVID-19 cases being admitted to hospitals.

SMC said two of its subsidiaries were particularly hit the hardest by the pandemic, namely San Miguel Brewery Inc. (SMB) and Petron Corporation.

“The implementation of the Enhanced Community Quarantine (ECQ) in mid-March did not help SMB’s operations which was already reeling from the effects of higher excise taxes,” it said.

SMB’s consolidated revenues dropped 39% to P42.8 billion, while operating income slid 61% to P7.4 billion.

Meanwhile, Petron suffered inventory losses of nearly P15 billion during this period, the recent stability in crude prices in July is seen to provide an estimated P3.5 billion in inventory gain for the company by the 2nd half of the year, according to SMC.

Petron incurred consolidated net loss of P14.2 billion for the first six months of 2020 versus its P2.6 billion net income in 2019. 

Consolidated revenues amounted to P152.4 billion, down 40% from P254.8 billion in the same period last year.

Consolidated sales volumes from Petron’s Philippine and Malaysian operations also fell 19% to 41.9 million barrels from 51.9 million barrels a year ago, amidst a sharp decline in fuel demand due to the pandemic. — BM, GMA News