San Miguel Food and Beverage expects to deliver “better profitability” in the second half of the year amid the decline in raw material prices, a top executive said Wednesday.
SMFB chief operating officer for food Francisco Alejo III said during the annual stockholders meeting prices of raw materials especially commodities started to go down from a recent peak.
“For the balance of the year, we expect and we are now seeing prices of raw materials specially commodities to start going down. In fact in June alone, several of our raw materials are already cheaper than the previous months,” Alejo said.
“We expect these better prices to continue for the balance of the year, resulting in a significantly better profitability to our balance of the year as compared to the first half,” he said.
Alejo said SMFB’s newly-built plants for animal feeds, poultry processing and processed meats were delivering efficiencies that resulted in better yield and margins.
SMFB food group also continues to implement several cost-saving initiatives to protect margins.
“As the market opens, we expect better sales and increased costumer spending. Things are actually looking up for the food group, and we would like to assure shareholders of better second half and a good year for 2023,” Alejo said.
SMFB posted consolidated net income of P9.9 billion in the first quarter, an 8-percent increase from the same period last year despite headwinds from inflationary pressures, excise tax increases and continuing geopolitical uncertainties.
First-quarter consolidated revenue rose 12 percent to P93.2 billion, driven by strong volume growth from its key businesses.
Sales for SMFB’s food business improved 3 percent to P41.9 billion, driven by strategic pricing across all segments.
The share price of SMFB rose 0.76 percent Wednesday to close at P46.45.