INFLATION, slower economic growth and the impact of geopolitical disruptions weighed on San Miguel Food and Beverage Inc.'s (SMFB) first-half profitability, with the company reporting a 4 percent year-on-year decline in net income despite slightly higher revenues.
The food and beverage subsidiary of San Miguel Corp. on Wednesday said net income slipped to P22.1 billion in the first six months of 2026 from P23.0 billion a year earlier even as revenues rose 2 percent to P205.3 billion as growth in its food business helped cushion softer beer sales.
Gross profit was steady at P58.4 billion, supported by higher revenue and cost management initiatives. Earnings before interest, taxes, depreciation and amortization (Ebitda) slipped 1 percent to P38.8 billion, while operating income declined 4 percent to P28.8 billion.
Despite the challenging operating environment, San Miguel Food said demand across its core product categories remained relatively stable.
"Our business remained resilient through the first half of the year, supported by the strength of our operations and the hard work of our teams across the businesses," Chairman Ramon Ang said.
"We are managing our costs carefully, adding capacity where demand is growing, and keeping our brands within reach," he added.
The food business led growth, with revenue increasing 5 percent from a year earlier to P99.3 billion on stronger sales from its feeds segment and sustained demand for Magnolia dairy and coffee products, Purefoods luncheon meat, Pinoy Favorites, and other value-oriented offerings.
Operating income in the segment rose 2 percent to P8.8 billion, while net income increased 8 percent to P6.4 billion.
Beer remained the company’s largest earnings contributor, although revenue in this segment slipped 1 percent year on year to P73.7 billion on lower discretionary spending amid elevated inflation and a weaker peso.
Domestic beer revenue held steady at P66 billion after a price adjustment earlier this year to offset higher excise taxes helped cushion softer volumes. International operations generated $128.5 million (approximately P7.64 billion), down from a year earlier, as shipping disruptions in the Middle East affected deliveries to the region.
Consequently, operating income from the beer segment dropped 11 percent to P14.4 billion while net income declined 12 percent to P11.4 billion.
In the spirits segment, first-half revenue was flat at P32.3 billion as higher prices offset softer volumes. Operating income increased 8 percent to P5.4 billion, while net income rose 3 percent to P4.4 billion.
San Miguel Food ended the first half with total equity of P205.3 billion, up 4 percent from a year earlier, while liquidity and leverage ratios also improved.
The company said it expected consumer demand to remain under pressure in the near term but maintained that its market-leading brands and stronger financial position would allow it to navigate the challenging environment.
It added that it would continue investing in capacity and operations and in strengthening its supply chain while maintaining cost discipline to support long-term growth.
San Miguel Food and Beverage shares slipped P0.30, or 0.61 percent, to close at P48.60 each on Wednesday amid a 0.16-percent downturn for the benchmark Philippine Stock Exchange index.
