SM Investments Corp. (SMIC), riding on the back of a robust Philippine economy, displayed strong performance in the first three months of the year with a net income of P6.7 billion from P6.24 billion for the same period a year ago.
SM President Harley Sy said consolidated revenues rose 7.7 percent to P65 billion from P60.40 billion for the same quarter last year, resulting in a net margin of 10.4 percent.
“We are focused on expanding all our core businesses given the favorable economic outlook,” Sy said. “Our expansion plans are geared towards meeting the needs of underserved customers across the country and to positioning ourselves to compete effectively in each of our growing markets.”
Revenue contributors for the January to March period include the 41 percent share of the banking segment, 40 percent of its property vehicle, and 19 percent from its recurring retail business.
For its banking segment, BDO Unibank Inc. increased its net income by 12 percent to P6.1 billion mostly on the growth of its net interest income by 9.3 percent to P13.3 billion.
Meeting its P22.8 billion net income target for 2014, BDO is confident it would hit its 2015 profit goal of P25.1 billion this year on the back of the promising first quarter performance and expansion plans this year.
Net income of its property unit, SM Prime Holdings Inc, soared 176 percent to P12.6 billion on strong sales and a P7.4-billion one-time extraordinary gains from marketable securities sale during the period.
Without the one-time gain, SM Prime profits grew 14 percent to P5.2 billion as its consolidated revenues improved by 9 percent to P16.7 billion from P15.3 billion the same three months last year.
For its commercial retail business under SM Retail Inc., the company reported a 6.5-percent growth in both profits and sales that reached P1.3 billion and P44.9 billion, respectively.
The stable recurring retail sales was attributed to the food retail business that expanded to urban and rural communities, opening 10 new stores within the quarter. As of end-March, SM Retail has 279 stores, comprising of 50 The SM Store, 40 SM Supermarkets, 43 SM Hypermarkets, 120 Savemore stores and 26 WalterMart stores.
This year, the company has programmed up to P85 billion for capital spending, the bulk of which will go to its property vehicle SM Prime Holdings Inc. This will be sourced from internally generated cash (60 percent) and funds raised from debt either from loans or bonds issuance (40 percent).
SMIC is the holding firm of the Sy family, which have business interests in property (SM Prime Holdings Inc.), banking (BDO Unibank Inc.) and retail (SM Retail Inc.). It also has affiliates such as China Banking Corp. and casino and entertainment firms Belle Corp. and Premium Leisure Corp.