SMC 2013 income may reach as much as P57B

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Diversified conglomerate San Miguel Corp. (SMC) is expecting a higher 2013 full-year profit, nearly doubling its target to P57 billion. This is after the Gokongwei-led JG Summit Holdings Inc. purchased from SMC its remaining stake in the Manila Electric Co.

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“Our earnings in SMC Group has always been in the uptrend for the last 15 years. Initially, we will be ending 2013 at about P37-billion net income but I don’t know if, finally, we may reach up to P57-billion net income,” Ramon Ang, SMC president and chief executive officer, said on Monday.

Late last year, JG Summit formalized its entry in the country’s largest power distributor as it completed the acquisition of 305.7 million common shares of Meralco from SMC, San Miguel Pure Foods Co. Inc. and SMC Global Power Holdings Corp.

JG Summit agreed to buy the Meralco shares from SMC for a total of P72 billion. The remaining entire stake of SMC in Meralco amounts to about 27 percent of the power distributor’s total outstanding shares.

JG Summit did several fund-raising to come up with the amount it owes to SMC for the Meralco shares.

“P39 billion is the initial estimate [for our 2013 full-year net income]but it may even go up because of the sale of the Meralco shares, kung buong-buo ma-book lahat [if everything will already be booked],” Ang reiterated.

He mentioned that the core earnings of SMC has been “very stable” with strong cash flow and high earnings before interest, taxes, depreciation and amortization (Ebitda) at $2 billion.

“With our Petron refinery upgrade about to run, the company has a good future. Once that’s running, our refinery should give us minimum $800-million Ebitda alone and another generating plant should come in,” he said.

“Yung mga business ng SMC is continuously improving [all the businesses of SMC is continuously improving],” he added.

As for the group’s other subsidiary, Ang reassured that the conglomerate will proceed with the listing of SMC Global Power Holdings in the Philippine Stock Exchange this year, despite on-going market volatility.

“As for the power investments of SMC, we will go for listing definitely this year,” Ang said, specifying that the power company will sell up to 49 percent of its shares to the public, which is valued at approximately $1 billion.

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