SMIC Jan-Sept net profit grows 11% to P22B


Sy sees prospects for insfrastructure investments

HENRY Sy-led conglomerate SM Investments Corp. (SMIC) said on Wednesday its consolidated net income in the first nine months of the year rose 11 percent from a year earlier to P22 billion on sustained growth of its retail, banking and property businesses.

Recurring core net income, net of one-time items, grew 9 percent. Consolidated revenues also increased by 9 percent to P252.4 billion from P230.8 billion a year earlier.

“Our core businesses are delivering solid growth in line with the investments we have made and against a background of stable economic fundamentals,” SM president Harley T. Sy said, adding that the group’s recently merged specialty retail stores also delivered double-digit top-line growth.

Sy sees growth opportunities in the current administration’s focus on infrastructure investment.

“The intention of the government program to invest heavily in nationwide infrastructure projects should help
economic development and drive provincial growth outside Metro Manila, which is where we are also directing our investments,” he said.

SMIC said earnings growth in the nine months was driven by property (13 percent), banks (11 percent) and retail 7 (percent).

“For the first nine months, banks and property each accounted for 39 percent of consolidated earnings and retail 22 percent,” it said.

The retail business under SM Retail Inc. posted sales growth of 9 percent to P186 billion while net income grew 7 percent to P7 billion on the recent acquisition of specialty retailers with 1,400 outlets, which also boosted its earnings by 7 percent.

To date, its retail portfolio consist of 55 department stores under The SM Store amounting to 700,000 square meters of floor area; 277 stores under retail brands such as Savemore, SM Supermarkets, SM Hypermarkets and WalterMart; 187 outlets of mini-mart stores under Alfamart; and more than 1,400 outlets of specialty stores.

In banking, BDO Unibank Inc. saw profits increase by 10 percent to P19.3 billion on solid revenues from lending, deposit and fee-based businesses despite lower trading incomes.

Affiliate China Banking Corp. also boosted its net income by 31 percent to P4.8 billion on strong core and fee-based businesses.

Property vehicle SM Prime Holdings Inc. saw net income grow 13 percent in the nine months to P17.5 billion on strong sales from malls, condominiums, office buildings, hotels, and convention centers here and in China.

SMIC is set to raise P50 billion from a planned fixed rate bond issue program within three years. The initial tranche of about P15 billion – likely to be issued in tenors of five to 10 years — is expected to be issued later this year.

SMIC’s core businesses are retail (SM Retail), real estate (SM Prime), and banking (BDO Unibank Inc.), while its non-core businesses include investments in mining, entertainment, and tourism.


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