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%, inflation rising, and geopolitical disruptions impacting sentiment and business confidence.

• Core net income grew 48% to PHP 54.2B, and consolidated operating income rose 17% year-over-year, driven by energy, food, spirits, and infrastructure.

• Reported net income fell 44% to PHP 37.7B 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 people upliftment framework, with measurable outcomes and multiple awards.

• 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-over-year, led by Petron, energy, and food segments.

• Operating income at PHP 102.3B, up 17% year-over-year; EBITDA reached PHP 141.9B, up 12%.

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

• Reported net income at PHP 37.7B, down 44% year-over-year due to non-core items; core net income at PHP 54.2B, up 48%.

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

Outlook and guidance

• Cautiously optimistic for H2 2026, expecting improved demand in food, beer, and spirits during the holiday season, but full recovery not anticipated.

• No price increases planned for beer and spirits to preserve market share; excise tax hikes seen as unlikely to impact near-term.

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

• Power EBITDA from new hydro and solar projects projected 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.