What Tomorrow
Looks Like

San Miguel Corporation’s financial position remained healthy in 2018. Even as the company actively pursued different funding sources for its various expansion projects, it closely monitored funding requirements and stayed well within its covenants with banks.

It completed several financing activities. On October 19, Petron Corporation completed and listed in the Philippine Dealing and Exchange Corporation its P20 billion Series C and Series D bonds, under its shelf registration. Tenors were at 5.5 years and 7 years, respectively. SMC Global Power also raised loans to acquire the Masinloc Power plant in March 2018 and to finance the construction of its Malita Power plant in Davao. The parent company continued to redenominate its US Dollar loans into peso-denominated instruments, to lower its exposure to the effects of forex movements.

On the equity side, it completed the consolidation of its food and beverage businesses into San Miguel Food and Beverage, Inc., changing its ownership from 95.9% to 88.76% after a follow-on shares offering that generated around P35.1 billion in proceeds.

As of December 31, 2018, SMC’s consolidated total assets stood at P1.68 trillion. Consolidated cash balance was up by P37.1 billion, ending at P243.2 billion in 2018. Non-current assets increased to P1.08 billion, mainly from increase in property, plant and equipment, investments and advances, and goodwill.

Total liabilities reached P1.16 trillion at the end of the year with interest-bearing debt amounting to P801.6 billion from P549.4 billion in 2017. This translated to net debt level of P558.5 billion in 2018.

Current ratio as of December 31, 2018 was at 1.37x, against 1.40x as of December 31, 2017. Total-liabilities-to-equity was at 2.28x while interest bearing debt-to-equity was 1.57x against 1.17x as of December 31, 2017.

SMC’s covenant with banks is measured on net-debt-EBITDA of up to 5.5x. As of December 31, 2018, this was at 3.02x from 1.83x as of December 31, 2017. The increase was mainly due to the funds raised to acquire the Masinloc power plant, which amounted to US$2.0 billion.

Stockholders’ equity amounted to P511.9 billion as of end of 2018 from P471.1 billion end of 2017.