MONDAY, 31 JANUARY 2011 20:57 MIGUEL R. CAMUS / REPORTER
CONGLOMERATE San Miguel Corp. (SMC) expects to book significant increases in revenues and cash flow in 2011 following the first full year of consolidation of its oil refining and power-generation units, its top official said on Monday.
In an interview with reporters, SMC president Ramon S. Ang said sales could hit P530 billion this year while cash flow, as measured by earnings before interest, taxes, depreciation and amortization or Ebitda, will rise to $2 billion.
Ang said prior to consolidation, the company booked P100 billion in sales, while Ebitda amounted to $750 million.
SMC recently acquired a majority stake in listed Petron Corp. Its power plants comprise facilities in Sual, Limay, San Roque and Ilijan with a capacity of about 3,000 megawatts. SMC is eyeing to double this figure over the next five years.
Ang said SMC may take its power plants public using the so-called back- door listing rule, should this route prove “faster.”
The conglomerate, which has been diversifying outside food and drinks since 2007, has yet to consolidate its telecommunication and coal mining assets, the company president added.
Ang spoke to reporters on Monday at the sidelines of an investor briefing hosted by unit San Miguel Pure Foods Inc., which is set to hold a P15-billion preferred share sale involving 15 million shares at P1,000 each. The offer will be held through February 14 to February 25.
Purefoods’ share sale may offer a dividend rate of 200 basis points to 250 basis points over the five-year benchmark bond at the Philippine Dealing and Exchange Corp., according to Eduardo Francisco, president of BDO Capital and Investment Corp.
BDO Capital is one of the arrangers of the company’s share sale next month. The dividend rate will be set on February 8.
Purefoods has allotted a capital spending budget of P2 billion this year for expansion, its president Francisco Alejo III said on Monday.
Bulk of the proceeds from the share sale is seen to fund Purefoods’s diversification into power, water, and other utilities to mirror the strategy of its parent company SMC.
SMC also plans to sell within this quarter up to 1 billion primary and secondary commons shares priced over P200 each to as much as P250.
Funds to be generated from the sale will be used to fuel new acquisitions including toll road acquisitions which the company expects to announce soon.
Ang said last week the company is looking to buy into the Metro Manila Skyway project and the Southern Tagalog Arterial Road or Star in Batangas City.
SMC may ask for extension of Indophil due diligence
Less certain, however, is SMC’s planned takeover of Australia’s Indophil Resources NL, owner of a third of the undeveloped $5.9 billion Tamapakan gold-copper project in Mindanao.
“The due diligence is still ongoing. If we are not satisfied with our due diligence, we will ask for an extension [from Indophil] if they will allow us,” Ang said in Filipino.
The deadline for SMC to complete its study of Indophil’s finances has already been postponed to February 10 from the original date of January 10.
SMC has already paid $40 million for a 10.1 percent stake in Indophil, formalizing its entry both into Tampakan and the precious minerals sector.
SMC shares lost 5.17 percent to P168.8 each on Monday.