SMIC income rises 10% in H1

MANILA, Philippines - SM Investments Corp., the holding company of the SM Group of Companies, reported a consolidated net income of P13.5 billion in the first half, up 10 percent year on year on robust revenues from its property business.

Excluding extraordinary items, recurring income grew by 13 percent.

Aggregate revenues rose six percent to P138.9 billion from P130.9 billion in the same period last year.

SMIC president Harley Sy said core businesses continued to deliver good revenue and earnings growth.

 “Earnings growth in property is now in the mid teens, in line with our medium term goals. The retail group maintained its pace through organic growth and store expansion despite its already significant size and intense competition.  Our focus on costs across the group resulted in improved operating margins.  While we are pleased with the results so far, we are keeping our eyes on the challenges ahead,” Sy said.

SMIC officials said the property business increased its contribution to total net income to 42 percent, followed by banks with 38 percent and retail with 20 percent.

By business segments, SM Prime Holdings registered a net income of P18.7 billion, nearly double the P9.8 billion recorded a year earlier. Excluding one-time trading gains on the sale of marketable securities, recurring net income was up 15 percent to P11.2 billion year-on-year.

Revenues were driven largely by rental revenues from retail and commercial spaces of new malls and expansion of existing malls, which accounted for 54 percent of consolidated revenues and represented a 10 percent growth to P19.4 billion.

Jeffrey Lim, vice president of SM Prime, said the company hopes to raise P12 billion to P15 billion in the latter part of the year.  It is also looking to raise P15 billion in the first half of 2016.

The group’s housing arm SM Development Corp.  posted a net income of P3 billion, eight percent higher than the previous year on net real estate sales of P12.3 billion.

SMDC intends to launch at least five new condominiums offering about 12,000-15,000 units.

In the commercial office space, SM Prime recently launched SM Cyberwest in Quezon City and Five E-comCenter at the MOA Complex which is already fully occupied.

For hotels and convention centers, SM Prime expects to open Conrad Manila at the MOA Complex and Park Inn by Radisson Clark in Pampanga in the last quarter of the year.

SM’s banking business through Banco de Oro and China Banking Corp. also reported growth in income.

BDO recorded a net income of P11.7 billion on the back of sustained growth in the bank’s lending and deposit-taking businesses as well as treasury activities and managed operating expenses.

 China Bank reported a 14 percent growth in profit  to P2.5 billion, driven by the strong growth in its core businesses.

 For its retail business, the SM Group sustained growth with net income rising 13 percent to P3.1 billion on P96.7 billion in total sales.

SM’s food retail business continued to expand in both urban and rural communities, adding 20 new stores in various parts of Luzon, Visayas and Mindanao.

As of the end of June, SM Retail had a total of 289 stores, comprising 51 SM stores, 41 SM Supermarkets, 43 SM Hypermarkets, 127 Savemore stores and 27 WalterMart stores.

 SM Retail is finalizing the acquisition of three stores of Cherry Foodarama located in Mandaluyong, Quezon City, and Antipolo.