One of the largest conglomerates in the Philippines, San Miguel Corporation (SMC), lost P2.4 billion on Aug. 12, 2013 due to foreign exchange losses. The strengthening of the US dollar against the peso made the company’s overall performance dip as it sufferred again by P10.2 billions last June.  Will this badly affect the company’s performances due to the billions of pesos lost?

The conglomerate had its ups and downs. The foreign exchange losses reflected their downfall but it can be easily recovered in six more months due to its strong attributes and performance. The losses that they had experienced can be covered through the gains of the company from having Php 64.3 million Meralco shares which was sold at P270 per share last July amounting to Php 9.6 billion. 
Moreover, the corporation showed a solid performance in the start of the year. In the first six months, its total revenues amounted to Php 357.6 billion from the strong accomplishments of its food subsidiary, San Miguel Pure Foods. The company also said that its operating income went up to Php 28.9 billion, a 19% higher than last year.

Cheaper price on raw materials also contributed on their growth. It had a healthy net debt at a 3.64 ratio. Overall, SMC is doing well on their half-year despite its foreign exchange losses. It did not affect the company so much, failing slow down that company’s momentum to progress even further.

San Miguel Chairman and Chief Executive, Eduardo Cojuangco Jr. said: “Forex losses mask the solid performance we had in our businesses. But we remain bullish about our underlying performance, which we attribute to a series of competitive advantages that should help us moving forward”.  

SMC is a well-built conglomerate that will continue to uplift their strong business accomplishments. It had been a successful corporation throughout the years despite what they lost in the first six months.  They managed to handle it through their company’s highlights not only on alcoholic beverages but also on their other diverse products such as non-alcoholic products and food subsidiaries; not to forget their business partners such as Meralco, Purefoods, Magnolia, and many more. 

Source: 
Austria, Jennifer. Company, A Web design. "Malaya Business News Online - Philippine Business News | Online News Philippines - SMC admits P10B forex loss; Meralco shares sold for cover ." Malaya Business News Online - Philippine Business News | Online News Philippines - World and Business News. (2013) http://www.malaya.com.ph/index.php/archive/160-news-flash/38311-smc-admits-p10b-forex-loss-meralco-shares-sold-for-cover (accessed August 23, 2013).

(Taken from Malaya Business Insight, August 13, 2013)

by: Emilio Antonio | Marcella Karaan | Julian Martinez | Ivy Zuniga 



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