San Miguel Brewery has issued a rare profit warning, saying its Hong Kong and China operations expects to post a net loss for the first half of 2015.
In a July 6 advisory to The Stock Exchange of Hong Kong, the San Miguel Corp. subsidiary attributed the expected loss to the non-renewal last year of the distribution agreements with Anheuser-Busch.
The agreement with the world’s largest brewer allowed San Miguel to market Budweiser, Beck’s, Stella Artois and related beer products, which accounted to over 25 percent of the annual turnover of San Miguel Brewery in 2013.
The end of the 15-year-old agreement left San Miguel with four foreign brands, Kirin — its joint venture-partner in Manila — Samuel Adams, Valor, and James Boag’s.
To make up for the loss of the Anheuser-Busch portfolio, San Miguel has been developing its own foreign-sounding brands like Bruck and Knight and, for the Chinese market, Dragon, Double Happiness and Guang, with its pineapple-flavored beer.
The company expects to announce its consolidated interim results for the first half of 2015 on August 5.
San Miguel Brewery reported a fiscal year 2014 profit of HK$36.9 million from HK$25.8 million the previous year.
Scorched-earth policy: 5 insurers battle record P2-B claim
The business proverb — If you owe millions to a bank, you are at their mercy; if you owe it billions, then the bank is at your mercy — does not hold true for insurance firms, as the Steel Corporation of the Philippines has ruefully found out.
Six years after a fire razed the SteelCorp’s cold rolling mill in its Balayan, Batangas plant, five of the six local insurers have opted to litigate rather than pay the P2-billion replacement claim, now running close to P4 billion if accrued penalties were added up.
The sixth, Standard Insurance, broke ranks and chose to settle its 12-percent share after the foreign insurance adjusters and fire forensic experts ruled out arson in the December 8, 2009 fire.
SteelCorp. needs to replace the burned half of its plant if it wants to stay competitive against the onslaught of Chinese imports, said chief finance officer Alberto Espiritu.
Because it was the only steel company that manufactured its cold-rolled coils that in turn translated to lower production costs, SteelCorp had cornered 20 percent of the steel roofing sheet market prior to the unfortunate conflagration.
“Without the cold rolling mill being replaced, SteelCorp is in fact better off importing the finished goods than producing them locally out of imported coils,” said Espiritu. “But do we, as a country, want to remain importers and forever dependent on other countries even for our basic shelter?”
But SteelCorp’s insurers, Mafpre Insular, Charter Ping An, Asia Insurance, New India and Malayan have their bottom lines and even survivability to worry about, rather than concern themselves with patriotism and even the Chinese trade dominance.
With arson no longer a reason to deny the SteelCorp’s claim, the five insurers still chose to slug it out, all the way to the Supreme Court if need be as they had done in an earlier round, anchoring their denial on the best, most convenient defenses: alleged lack of jurisdiction and prescription.
“As they appear not to have any physical evidence, they (insurance companies) are looking for financial evidence that would have acted as motivation for arson,” said SteelCorp’s Singapore-based claims consultant, Peter Salt.
SteelCorp has until this week to file its answer why the Insurance Commission should not dismiss its administrative complaint against the five insurers for lack of merit and, of course, prescription and forum-shopping.
A similar civil complaint, also to force the insurers to pay up, is pending before Makati Regional Trial Court Judge Josefino Subia, with the five insurance companies seeking outright to dismiss the case for having allegedly been filed past the deadline.
In both cases, SteelCorp is represented by BalgosLaw while the insurance companies, by Nestor Mejia, the corporate secretary of the Philippine Daily Inquirer.
• Coca-Cola Bottlers, the paint company Dutch Boy and even the heirs of the late Transportation Secretary Josefina Lichauco have all come to the conclusion that they would rather have their Makati Sports Club shares auctioned for non-payment of dues rather than continue on with their respective memberships.
Their three shares, along with 10 others, are scheduled to be sold via viva voce bidding on July 24.
• BLOOM : Bloomberry owner Enrique Razon has been hauling in and out a growing number of high-rollers into his Solaire casino-hotel that he has been forced to hire an expatriate to run the gaming concern’s aviation operations.
The expat was imported from mainland China, naturally.
Heard through the grapevine
The Supreme Court en banc has rejected the appeal of the Development Bank of the Philippines and ordered its former chairman Vitaliano Nañagas III and director Eligio Jimenez to reimburse P1.57 million in unauthorized travel expenses the two had incurred in 2004.
Nañagas was found to have flown three times to Vietnam, Japan and Hong Kong in October and November 2004 while Jimenez embarked on a month-long trip to the United States in October 2004, with both bankers failing to secure prior clearances from Malacanang.
Edwardo Miguel Guevarra Roldan
Isang Samahan, Isang Pilipinas (ISIP) and Think Philippines!
0927 646 0088 – GLOBE
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