SMIC profit up 15% to P21.2 billion in 2011

MANILA, Philippines - SM Investments Corp. (SMIC), the holding firm for the business interests of the family of the country’s richest man Henry Sy, reported a 15 percent rise in earnings last year to P21.2 billion, mainly driven by the steady growth of its banking, shopping mall and real estate operations.

In a financial report filed with the stock exchange yesterday, SMIC said consolidated revenues went up 13 percent to P200.7 billion in 2011.

Among SMIC’s core businesses, the banking group contributed the most to the 2011 profit, accounting for 31.1 percent of total. The retail group came in second with 30.2 percent, while shopping malls and real estate chipped in 23.5 percent and 15.2 percent, respectively.

SMIC president Harley T. Sy said the company was able to “continue delivering positive results amid increased challenges in the external environment”.

SMIC owns controlling stakes in mall giant SM Prime Holdings Inc., property firm SM Development Corp. (SMDC) and lenders Banco De Oro Unibank and China Banking Corp. It also holds a 17-percent stake in Atlas Consolidated Mining and Development Corp.

BDO posted a net income of P10.5 billion in 2011, 19 percent higher than the P8.8 billion recorded a year earlier, on the back of a 24 percent rise in loan portfolio.

China Banking Corp., on the other hand, chalked in a net income of P5 billion, translating to a return on equity of 13.7 percent and a return on assets of two percent.

Net earnings from SMIC’s retail group improved three percent to P5.8 billion while sales increased nine percent to P148.2 billion.

SM Retail opened 34 new stores in 2011, bringing its total network to 169 by the end of the year. The group will continue its expansion with main focus on the provinces, with 30 to 40 new branches of SaveMore expected to rise across the country.

Shopping mall chain SM Prime, meanwhile, grew its net earnings by 15 percent to P9.1 billion on the back of a 13 percent hike in revenues.

These results include the operations of the four SM malls in China, located in the cities of Xiamen and Jinjiang in Southern China, Chengdu in Central China, and Suzhou in Eastern China.

For SMDC, earnings grew 38 percent to P4.18 billion as revenues expanded 69 percent to P16.92 billion.

To maintain its upward growth trajectory, SMIC has set a P54-billion capital expenditure program this year, higher than the planned capital budget of P43 billion in 2011. Bulk, or P40 billion, will come from internally-generated cash while P14 billion will be funded by way of equity or debt issue by the group.

This year’s capex, the highest ever for the company, will mostly go to mall development and construction of residential and office buildings.