San Miguel bullish on recovery
San Miguel Corporation is determined to help the wider economy recover from the effects of the pandemic by pouring resources into creating jobs, helping the poor, building resilience among vulnerable sectors and increasing the nation’s capacity to test in order to save more lives.
Coming from its Annual Stockholders’ Meeting, held via video conferencing, SMC president and COO Ramon S. Ang expressed confidence on the economy’s ability to recover strong, even as he acknowledged the need for companies to adapt to changes in the business environment.
“We are still dealing with a crisis today. Until there’s a cure for COVID-19, we cannot let our guard down. Nevertheless, we are determined to work smart and safe and do our part to help our economy, our country and people during this critical time,” Ang said.
“The best way we can do this is to continue, and not scale back, on investments in infrastructure and capacity expansion, as well as provide support for the poor, and other key sectors such as agriculture and the health industry,” Ang said.
New manufacturing facilities, infra projects continue
Ang added that all of SMC’s ongoing major projects, including the construction of new manufacturing facilities in various regions nationwide and major infrastructure projects such expressways, railways, and its proposed airport in Bulacan, will continue.
“All our major, important projects will continue. Before the pandemic, and even more so now, we believe these projects will be key to making more Filipinos resilient, by providing jobs and boosting local economies, which in turn, will provide livelihood opportunities,” Ang said.
“With more manufacturing facilities in key regions that provide direct jobs and downstream employment, infrastructure that increases mobility and ease of trade, and sufficient and reliable access to power and fuel, we hope to help our economy through this crisis and boost our nation’s recovery,” he added.
Among the new facilities the company is completing are 12 feed mills of one million annual tons capacity each, expanded poultry farms and a poultry processing facility; new breweries in Cagayan de Oro and Sta. Rosa in Laguna, the new unit of Masinloc Power Plant, and ongoing infrastructure projects such as: Skyway 3, Skyway Extension, Skyway 4, MRT-7, and TPLEX.
SMC reported a steady performance in 2019, with consolidated revenues reaching P1.02 trillion, same level with the previous year, reflecting sustained demand for its products and services despite setbacks suffered by its fuel subsidiary, Petron Corporation following global oversupply and volatile oil prices brought about by the trade war between Russia and Saudi Arabia.
Consolidated operating income reached P115.7 billion, slightly lower by 1% as the strong performance of the Beer, Spirits, and Power businesses, cushioned the slowdown in its Petron and Food businesses.
Reported consolidated net income of P48.6 billion was likewise at par, while EBITDA rose 3% from the previous year to P162.4 billion.
Help for poor communities, farmers, medical sector
Throughout the enhanced community quarantine (ECQ) and beyond, SMC led private sector efforts to help mitigate the impact of the pandemic on Filipinos, particularly disadvantaged communities, medical front liners, and the agricultural sector.
In all, the company’s COVID-19 response efforts have reached P13.112 billion as of June 25. These include:
- P3.09 billion in compensation for employees and third-party providers during ECQ
- P511.1 million in food donations, including canned products, poultry, fresh meats, bread, flour biscuits, milk, coffee, rice
- P500 million for medical donations, including PCR testing machines, testing kits, personal protective equipment, and other medical donations
- P100 million contribution to Project Ugnayan from Ramon S. Ang and family
- P97.1 million worth of free alcohol (1.3 million liters)
- P30.7 million worth of toll fees waived for medical front liners
- P6.2 million in free fuel for government’s Libreng Sakay programs for medical workers
- P7 million for emergency quarantine facilities with 15 beds each nationwide
The company also paid government P8.77 billion in advanced taxes, concession, and contractual fees during the early months of the quarantine period, to help ensure that funds would be available to the government for its critical response to the pandemic.
SMC also provided significant assistance to farmers nationwide by providing guaranteed offtake for 78 million kilograms of corn to boost farm incomes. The company also partnered with the Department of Agriculture (DA) to open Kadiwa stores at Petron stations to enable farmers to sell their produce to consumers.
SMC also purchased excess carabao’s milk for donation, to help carabao farmer cooperatives and pledged R&D support to improve product shelf life and marketability.
Well-positioned for a recovery
SMC, which reported much lower results in the first quarter of the year due to the lockdown and virtual shutdown of all economic activities, is looking forward to a recovery.
The company was poised for a strong start in the first two months of 2020: For the months of January and February, the company booked revenues of P160.5 billion and consolidated EBITDA of P21.3 billion.
Following the quarantine, which also necessitated liquor bans and the stoppage of transportation, SMC’s first quarter consolidated revenues slid 15% from the same period last year to P214 billion, while EBITDA ended 34% lower at P27 billion.
“Our major businesses are well-positioned to make recoveries, especially with the lifting of restrictions starting June. Since May, we have been seeing a recovery. We’ve lost no time in working to regain our position and doubling our efforts to serve consumers,” Ang said.
“In terms of operations, we were able to continue essential activities throughout the quarantine—we ensured food, power, fuel supply, and the continuous running of expressways. We were also able to launch new ways to make our products available in more channels. These will be part of our next normal,” he added.
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