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SMC Posts 32% Growth in Operating Income for 2001.

Business Editors

MANILA, Philippines--(BUSINESS WIRE)--Feb. 28, 2002

San Miguel Corporation (SMC), the Philippines' largest food and beverage company, announced consolidated operating income of P10.5 billion ($205.9 million(a)), 32% higher than the previous year's P7.9 billion.

Consolidated net income without the newly acquired Purefoods and Coca-Cola Bottlers Phil., Inc. (CCBPI) would have reached P7.3 billion ($143.1 million), up 7% from the previous year. With the acquisitions and their resulting short-term dilutive effect, net income amounted to P6.5 billion ($127.5 million) against P6.8 billion in 2000. EBITDA (earnings before interest, taxes, depreciation and amortization) was at P18.6 billion ($364.7 million), up 44%.

SMC broke the P100 billion revenue mark to post P121.6 billion ($2.4 billion) in consolidated net sales for the year 2001, up 48% from P82.3 billion the previous year. Revenues grew across all businesses despite an increasingly competitive and difficult environment, with a 48% increase for beverages, 90% for the food group and 1% for packaging. This performance also reflects the consolidation of Purefoods and CCBPI into the San Miguel operations.

Operating income for the domestic beer operations was flat at P4.1 billion ($80.4 million) due to higher raw material costs and lower volumes. Other costs, however, were contained through tighter management of resources and higher efficiencies. Sales revenue declined by 1% from 2000 levels.

Domestic beer volumes declined by 3% due to a slow down in consumer spending and weak farm incomes. SMC purposively corrected trade inventory levels and clamped down on accounts receivables (AR) bringing down AR levels significantly from P7.4 billion at the start of the year to P5.4 billion ($105.9 million) by year end.

Beer International achieved a 31% increase in operating income to $8.8 million from the previous year's $6.7 million. This improvement was driven by a better product mix, continued rationalization of sales efforts and distribution systems, and cost management programs. Sales revenue improved by 5% to $237.6 million.

Revenues of La Tondena Distillers, Inc. (LTDI) went up by 8% to P15.3 billion ($300.0 million). Operating income was 2% higher at P2.92 billion ($57.3 million) versus P2.87 billion in 2000 while net income increased by a hefty 39% to P1.9 billion ($37.3 million) from P1.35 billion, including the gains on the sale of the non-liquor business.

Sales volume of Coca-Cola Bottlers Philippines, Inc. (CCBPI) from May to December 2001 reached 258.9 million cases. Sales revenue amounted to P21.1 billion ($413.7 million) with an operating income of P1.1 billion ($21.6 million). The Company is focusing on programs to improve selling and distribution systems and operating efficiencies particularly on assets usage, power, fuel and breakage.

In early 2001, SMC bought back 65% of CCBPI from Coca-Cola Amatil of Australia. Last month, it finalized the acquisition of Cosmos Bottling Corp. through its subsidiary Philippine Beverage giving SMC the indisputable lead position in the domestic beverage market. Redefining the entire soft drinks business will be the main objective for the year as the Company moves to maximize synergies at all levels of the CCBPI, Cosmos, Phil. Beverage and SMC organizations.

Revenues of the San Miguel Food Group (SMFG) were 90% higher at P32.7 billion ($641.2 million) driven by strong volumes across all products lines and improved poultry prices, as well as the consolidation of Purefoods. Operating income jumped 269% to P2.1 billion ($41.2 million) from P576 million in 2000. Purefoods contributed P12 billion in sales (April to December 2001) and P1.2 billion in operating income.

San Miguel Packaging Products (SMPP) posted revenue growth of 1% to P13.6 billion ($266.7 million). However, operating income declined by 17% to P1.6 billion ($31.4 million) as the division was hard placed in effecting price increases given intense competition among local and foreign packaging suppliers.

Founded in 1890, San Miguel is the largest food and beverage company listed in S.E. Asia and is active within the brewing and beverages, food and food-related, and packaging areas. San Miguel's ordinary shares trade on the Philippine Stock Exchange and trade in ADR form in the US (each equal to ten SMC Class B common shares). Prices for the ADRs may be accessed on the NASD OTC Bulletin Board under the symbol SMGBY. Quotes for San Miguel ordinary shares may be accessed on Bloomberg under the symbol SMC/B PM and on the Reuter Equities 2000 Service under the symbol SMC.

Note for SMC followers:

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(a) Income statement figures have been converted for reader convenience at the exchange rate US$1 = P51.00
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Publication:Business Wire
Date:Feb 28, 2002
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