SMIC allots P31-billion capital expenditures for 2009

MANILA, Philippines – SM Investments Corp. (SMIC), the listed investment holding firm of the family of retail tycoon Henry Sy, is ramping up its investments in its four core businesses with its 2009 total capital expenditures set at P31 billion, 29 percent higher than the previous year.

In a press briefing following the firm’s stockholders’ meeting yesterday, SMIC president Harley T. Sy said the company’s capex manifests the group’s commitment to long-term growth and development.

“Amid every crisis we have experienced over the past 50 years, SM emerges as a stronger business believing in the overall potential of the Philippine economy,” he said.

Sy said the group focuses on areas “we know best and continue to provide long-term growth opportunities, namely retail, mall operations, banking and property development.”

SMIC executive vice-president and chief finance officer Jose T. Sio said the capital budget includes the expansion of the group’s mall operations in China. It will be funded by internally generated cash.

Bulk of the capital budget or P12 billion will be used to shore up its shopping mall operations. Three new local malls will open this year namely SM Naga, SM Pamplona, Las Piñas and SM Rosario, Cavite. Plans are also underway for the establishment of three new malls in China with an estimated investment of P5.5 billion.

Around P7.2 billion will go to residential development and some P5.1 billion will be channeled to hotel development.

Another P2.7 billion has been earmarked for the construction of office buildings catering to the business process outsourcing (BPO) sector as well as a ferry terminal that will connect to Hamilo Coast in Batangas.

Josefino Lucas, executive vice-president of SM Land Inc., said the group will be breaking ground for TwoEcomCenter, the second of four BPO buildings planned in the Mall of Asia complex.  

Lucas said construction of the ferry terminal will commence this year and is slated for completion in 2010. 

About P1.6 billion has been set aside for the ongoing development of Hamilo Coast, the country’s emerging premier eco-tourism destination. Set to open are the beach and country club.

A hotel will likewise be built this year for completion in a year and a half.

Sio said SMIC is confident it would meet its targeted income growth this year of 12 to 14 percent given the continued strong performance of its subsidiaries in spite of a global financial downturn.

Both food and non-food retail sales have grown by double digits in the first quarter, reflecting improved consumer spending.

Sy said the group continues to be on the lookout for properties for future development to sustain growth.

Gregory Domingo, executive director of SMIC, said the company has spun off its hotel and entertainment businesses into a separate unit to prepare the group for its large-scale projects. The new unit shall serve as the vehicle for the group’s luxury hotels, exhibition and convention centers, sports arena and entertainment centers.