San Miguel (SMC) Q2 2026 earnings summary

Executive summary

• Delivered resilient first half 2026 results despite a challenging Philippine macro environment, with GDP growth slowing to 2.6%, elevated inflation, peso depreciation, and Middle East disruptions impacting sentiment and business confidence.

• Core net income grew 48% and consolidated operating income rose 17% year-on-year, driven by strong energy, food, spirits, and infrastructure contributions, despite reported net income falling 44% due to absence of prior year one-off gains and a PHP 16.5B forex loss.

• Sustainability initiatives advanced, including climate risk assessment, net zero roadmap, and social upliftment, with international awards and measurable outcomes from flagship programs.

• The US-Israel-Iran conflict led to higher fuel, raw material, and power costs, impacting margins and demand in several segments.

Financial highlights

• Consolidated revenues reached PHP 964.1B, up 34% year-on-year, led by higher selling prices and volumes at Petron, robust energy, and record-high food volumes.

• Operating income rose to PHP 102.3B (+17% YoY); EBITDA reached PHP 141.9B (+12% YoY); reported net income at PHP 37.7B (-44% YoY), mainly due to non-recurring items and forex losses.

• Excluding non-core items, net income grew 48% to PHP 54.2B.

• Total assets as of June 30, 2026: PHP 3.0T; liabilities: PHP 2.2T; equity: PHP 794B; cash: PHP 454B; interest-bearing debt: PHP 1.8T.

• Gross profit increased 15% to PHP 155.3B; cost of sales rose 39% to PHP 808.8B.

Outlook and guidance

• Cautiously optimistic for H2 2026, expecting improved demand in food, beer, and spirits during the holiday season, but full recovery to prior year levels unlikely due to lingering market challenges.

• No immediate impact expected from proposed excise tax increases; price hikes for beer and spirits not planned to preserve market share.

• Group CapEx for 2026 projected north of PHP 200B, with power segment accounting for about half.

• Power EBITDA from new hydro and solar projects expected to exceed PHP 50-60B annually at full capacity.

• Management continues to monitor geopolitical risks and supply chain disruptions, with ongoing risk management and cost control initiatives.