San Miguel Food and Beverage Inc. (SMFB), a unit of conglomerate San Miguel Corp., said it expects its performance to improve in the second semester as raw material prices continue to drop.
Francisco Alejo III, the company’s COO for food, said as markets continue to reopen, consumer spending and sales will rise.
“Things are actually looking up for the food group. And we would like to assure the stockholders have a better second half, and a good year for 2023,” Alejo said during the company’s stockholders’ meeting on Wednesday.
“For the balance of the year, we expect and we’re seeing prices of raw materials, especially commodities to start going down.”
Alejo said several of the raw materials used by the company are already cheaper in June compared to prices seen in previous months.
“And we expect these better prices to continue for the balance of the year, resulting in a significantly better profitability for our balance of the year as compared to the first half.”
Alejo also said the company’s newly built plants for animal feeds, poultry processing plants and processed meats are delivering efficiencies that result in better yield and margins.
“This is on top of the several cost saving initiatives that the food group has been implementing.”
In the first quarter, SMFB was able to maintain its growth momentum despite facing headwinds from inflationary pressures, excise tax increases and continuing geopolitical uncertainties, among others.
“In the first quarter of 2023, SMFB maintained its growth momentum even as it faced multiple headwinds from inflationary pressures, excise tax increases and continuing geopolitical uncertainties, among others,” SMFB President and CEO Ramon S. Ang said.
“In the first quarter of 2023, the Philippine economy grew by 6.4 percent year-over-year, above market consensus of 6.1 percent, supported by still robust household consumption.”
And said, however, that analysts advise caution given the threat of high inflation, elevated borrowing costs and rising debt levels that could weigh on the economy’s momentum. There are also potential challenges mounting across sectors with the agricultural sector facing an El Niño episode, which can affect the manufacturing sector, Ang said.