• SMC to raise P60B from fixed rate bonds


    Group nets P43B in Jan-Sept

    CONGLOMERATE San Miguel Corp. (SMC) said it plans to raise P60 billion from the debt market in a span of three years.

    In a disclosure to the Philippine Stock Exchange, SMC said its board of directors has approved the filing of a shelf registration statement and prospectus with the Securities and Exchange Commission (SEC), seeking to issue P60 billion worth of fixed rate peso-denominated bonds.

    Under the SEC’s shelf registration rule, a company may apply to raise a certain amount in the fixed income debt market, which may be issued in multiple tranches within three years.

    The initial tranche will amount to P20 billion, with or without an oversubscription option. The bonds are intended to be listed on the Philippine Dealing and Exchange Corp. (PDEX).

    Group nets P43B as of end-Sept

    SMC also reported its consolidated net income reached P43 billion in the first nine months of the year, up 60 percent from the P26.8 billion recorded a year ago, driven by the strong performance and sustained growth across all its businesses during the third quarter.

    Recurring income improved by 54 percent to P31.1 billion from P20.2 billion last year.

    Consolidated operating income hit P73.2 billion, up 24 percent from the previous year, on the sustained growth of its core beverage, food, and packaging businesses as well as higher contributions from its power and infrastructure segment and higher margins from its oil refining unit Petron Corp.

    SMC’s core businesses all posted double-digit growth in operating income: beer with 19 percent growth; Ginebra, 65 percent; food, 25 percent; and packaging, 12 percent.

    Its new businesses likewise recorded strong performances, with operating income from power up by 18 percent, Petron at 23 percent, and infrastructure and toll roads at 7 percent.

    Established in 1890, SMC is a diversified conglomerate led by businessman Ramon Ang which holds his businesses including beverages, food and packaging (San Miguel Brewery Inc., Ginebra San Miguel Inc., San Miguel Pure Foods Company Inc.), fuel and oil (Petron), energy and power (SMC Global Power), infrastructure, and banking.


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    1. 3Q earnings was lower than the previous qtr. Currently, foreign or $ denominated loans are bigger than peso loans thus with the continued depreciation of the peso, we could expect higher finance charges, as well as, foreign denominated debt loss going forward. With the recent conversion of the proceeds of Series 2 preferred loans of its purpose from refinance of loans to investments together with the bond offering, the debt to equity of 2.0 will further increased thus making the investments riskier especially with the current uncertainties prevailing in the Global Market.