San Miguel Reports 48% Core Profit Surge on Energy and Food Strength

Conglomerate Posts Strong Operational Growth

San Miguel Corp. delivered a sharp increase in core profitability during the first six months of 2026, underscoring the resilience of its diversified business model amid a challenging operating environment. Core net income climbed 48 percent to ₱54.2 billion, while consolidated revenues expanded 34 percent to ₱964.1 billion, according to the company's financial disclosures.

The Manila-based conglomerate attributed the performance to higher volumes and pricing in its petroleum business, stronger output from its power generation arm, and continued expansion in its food operations. Chairman and CEO Ramon Ang acknowledged that cost pressures and market volatility persisted but emphasized the soundness of the group's underlying operations.

Reported consolidated net income, however, fell 44 percent year-on-year to ₱37.7 billion, reflecting foreign exchange movements and other non-core adjustments. The prior-year comparison was also affected by a one-time gain of ₱21.9 billion from the disposal of certain power assets in a chromite-related transaction.

Fuel Business Drives Revenue Expansion

Petron Corp., San Miguel's petroleum subsidiary, saw revenues surge 57 percent to ₱605.9 billion, propelled by higher crude prices and increased sales volumes. Net income, however, declined 27 percent to ₱3.8 billion as geopolitical tensions in the Middle East pushed up crude costs, import premiums, freight expenses and other operating outlays.

The divergence between top-line growth and bottom-line pressure highlights the margin squeeze facing refiners across the region. Despite elevated input costs, Petron maintained market share through volume growth, a strategy that prioritized revenue capture over short-term profitability.

Power Unit Delivers Margin Expansion

San Miguel Global Power recorded a 27 percent increase in revenues to ₱101.9 billion, while operating income nearly doubled, soaring 90 percent to ₱42 billion. The power generation business benefited from improved dispatch rates and higher contract volumes as the Philippines continued to grapple with energy supply constraints.

The unit's margin expansion reflects both operational efficiency gains and favorable pricing dynamics in the wholesale electricity market. As the country's industrial base recovers and demand for baseload capacity remains firm, independent power producers with diversified fuel sources have been able to capture pricing premiums.

Food and Beverage Unit Shows Stability

San Miguel Food and Beverage Inc. posted a modest decline in earnings, with net income slipping four percent to ₱22.1 billion. Revenues edged up two percent to ₱205.3 billion, as growth in the domestic food business helped offset softer consumer spending and disruptions in certain export markets.

The food segment's relative stability provides a defensive anchor for the conglomerate's earnings profile. While consumer discretionary spending has been pressured by elevated inflation and high borrowing costs, staple food categories have held up better than other segments of the retail market.

Infrastructure and Cement Face Headwinds

San Miguel Infrastructure reported revenues of ₱20.5 billion, up three percent year-on-year, even as average daily traffic across its toll road network declined one percent to 1.07 million vehicles. Elevated fuel prices have dampened road travel demand, a trend that has affected toll operators across Southeast Asia.

The group's cement business, which includes Eagle Cement, Northern Cement and Southern Concrete Industries, recorded a two percent revenue increase to ₱18.2 billion. Higher sales volumes and market share gains were offset by lower average selling prices, as the sector contends with intense competition and continued pressure from cement imports.

Outlook Remains Anchored in Discipline

Ang signaled that the conglomerate would maintain a disciplined approach to capital allocation and cost management as it navigates the balance of the year. The company intends to continue investing in areas that support long-term growth and align with broader infrastructure and energy development priorities in the Philippines.

San Miguel's diversified portfolio has historically allowed it to weather cyclical downturns in individual sectors, and the first-half results suggest that dynamic remains intact. The challenge for the group will be sustaining margin expansion in its power business while managing input cost volatility in fuel and navigating subdued consumer sentiment in its food and beverage operations.

With the Philippine economy projected to grow in the mid-single digits this year, demand for energy, infrastructure services and basic goods is expected to remain firm. How San Miguel manages the interplay between volume growth and margin protection will be a key determinant of its full-year performance.