San Miguel Brewery reports 38% profit growth in Q1

San Miguel Brewery Inc. (SMB), the beer unit of conglomerate San Miguel Corp., said its income for the first quarter rose 38 percent to P6.8 billion from the previous year’s P4.93 billion on higher sales volume, according to a report by BusinessMirror.

Revenues for the period went up by 29 percent to P38.3 billion from P29.7 billion last year on the positive sales performance of both its domestic and international operations amid the continued easing of Covid-19 restrictions.

SMB posted a consolidated operating income of P8.4 billion, up by 25 percent compared to last year.

The company said domestic beer volumes grew 26 percent on the back of new brand campaigns and off take-generating programs, complemented by relaxed restrictions.

Its international operations, meanwhile, posted a 28-percent increase in sales volume on the back of its exports business and Hong Kong operations.

Volumes, however, are still 16.4 percent short of 2019 prepandemic levels, the company said.

SMB started its recovery in the domestic market last year when its net income rose by almost 5 percent to P19.54 billion.

Revenues reached P121.85 billion driven by the significant volume growth, better brand mix, and the full year impact of the October 2021 price increase.

Its overseas operating income for the year 2022 was higher by 33 percent at $46.1 million, largely driven by favorable volumes, increased selling prices and managed fixed expenses, tempered by increasing production costs.

Sales in the Hong Kong, south China and Vietnam operations were lower at year-end. The zero Covid-19 policy of the Hong Kong and China governments resulted in curbs and restrictions that affected the volumes of the Hong Kong and South China operations.

However, the volume declines in these markets were reduced by focused programs to recover volume in San Miguel Brewery Hong Kong Limited and the continued re-penetration drive efforts with wholesaler incentive trade support in South China.

“The extended on-premise and domestic restrictions in the first semester largely affected the volumes of the Vietnam operations but was cushioned by the growth of San Miguel brands in the last half of the year as a result of sales expansion programs,” SMB said.