San Miguel bought National Foods for US$1.5 billion last year and says it is now integrated with Australia's biggest juice firm Berri, acquired by San Miguel the previous year. Since changing hands, National Foods has been expanded further with the acquisition of Lactos, a leading specialty cheese company in Australia.
These higher margin businesses, and other international operations, helped San Miguel counter low domestic spending.
The company said overall operating profit amounted to P11.1 billion (€170m) for the first half, up by 48 per cent. Without National Foods, San Miguel's first-half net income would have increased by only 7 per cent and operating income 21 per cent, analysts said.
"The consolidation of National Foods contributed much to the increase, coupled with benefits from improved raw material costs and more rigorous cost containment measures," said San Miguel in a statement to the Philippines stock exchange.
Chief executive Eduardo Cojuangco revealed in May that it had put in place a domestic raw material sourcing programme expected to save significant amount of foreign exchange when fully implemented.
Other initiatives were aiming to encourage more efficient supply chain manufacturing, and trade and media spending.
Sales during the first half were also up 21 per cent to P121.6 billion, suggesting that Cojuangco would keep his promise to shareholders in May to concentrate on improved sales and profits after a period of expansion.
The company attributed the sales increase to faster sales growth at San Miguel's overseas operations. International business now accounts for more than 30 per cent of San Miguel's sales, compared with only 13 per cent in 2004.
Aside from National Foods, the group also owns four breweries in China and a brewery in Indonesia, Australia, Vietnam and Thailand.
These operations are helping to offset lower domestic sales of beer, spirits, and juices. San Miguel's revenue from domestic beer sales fell 2 per cent to P20.1 billion.
Meanwhile San Miguel's soft-drink unit, the Coca-Cola Beverage group, posted a 4 per cent drop in first-half revenue to 19 billion pesos. The group is believed to be in talks with Coca Cola to sell its 65 per cent stake in the unit.
It is also hoping to see growth from a snack foods business, newly launched in June.
