SM Investments Corp. (SMIC), the holding company of the Sy-led SM Group, said it is merging all its retail businesses under one company as it reported flat income for last year.
In a statement on Monday, SMIC said its Board of Directors has approved the proposed merger of its various retail businesses, consisting of stores that specialize in a variety of products from toys to home furnishings, with SM Retail Inc., which currently houses several of the chain of specialty stores.
The companies to be folded into SM Retail currently operate a combined 1,374 outlets.
These include Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company, Sports Station and several other specialty stores.
The stores contributed P53 billion in combined revenues for last year.
With the merger, SM Retail will have 1,927 outlets and 2.4 million square meters of gross floor area across a diverse portfolio.
With the merger, SMIC will own 77.3 percent of the enlarged SM Retail.
SMIC said attributable net income in 2015 was P28.4 billion, flat from the previous year.
Consolidated revenues, on the other hand, rose 7 percent to P295.9 billion versus P275.7 billion from a year before, propelled by the growth in retail earnings, property development and bank income.
For 2015, banks accounted for 40 percent of SM’s consolidated earnings, while retail represented 22 percent, and property 3 percent.
SM Retail, which for last year only consisted of both food under the SM Markets and non-food for the department store, reported 7 percent sales growth to P211.4 billion, while net income rose 17 percent to P6.8 billion.
SM Markets, comprised of its brands of grocery stores, continued to expand and added 31 new stores, most of which are standalone Savemore stores.
As of end of last year, SM Retail had a total of 310 stores, comprising 53 department stores, 45 supermarkets, 44 hypermarkets, 136 Savemore stores and 32 WalterMart stores.
Meanwhile, BDO Unibank Inc., the country’s largest lender, recorded net interest income growth of 11 percent to P57 billion last year, with net income up 10 percent to an all-time high of P25 billion.
SM Prime Holdings Inc., its property holding firm, saw its recurring net income growing by 14 percent last year to P20.9 billion. Consolidated net income increased 54 percent to P28.3 billion, which includes a P7.4 billion trading gain on marketable securities booked in the first quarter.