MANILA—SM Investments Corp. increased its first-semester net profit by 16 percent year-on-year to P12.6 billion on the back of the group’s robust banking and shopping mall businesses.
SM Investment Corp. website
The operations of Banco de Oro Unibank and China Banking Corp. accounted for the largest share of SM’s consolidated net income, contributing 49.7 percent of the total. Retail merchandising contributed 20 percent, followed by commercial centers or mall operations and real estate at 18.4 percent and 11.9 percent, respectively.
“Our first-half financial results [are] ahead of our full-year target as BDO Unibank delivered a stellar performance from trading gains. We expect the second half to normalize but still at the back of the strong growth expectations of all our core businesses. The Philippines is in a unique position to support a vibrant domestic consumer sector. This gives us reason to pursue our growth and expansion plans over the medium term,” SM president Harley Sy said.
Group-wide revenues increased by 16 percent to P122.1 billion in the first six months while cash flow, as measured by earnings before interest, taxes, depreciation and amortization (EBITDA), rose by 26 percent to P30.1 billion, for an EBITDA margin of 24.7 percent.
SM’s retail business reported a net income of P3.1 billion, up by 9.9 percent year-on-year in the first half, for a net margin of 3.7 percent. Sales rose by 13.3 percent to P83.6 billion.
The country’s largest retailer ended the semester with a total of 209 stores—48 SM Department stores, 38 SM Supermarkets, 37 SM Hypermarkets and 86 SaveMore stores.
It was earlier announced that BDO, SM’s crown jewel, doubled its six-month net income to P14.1 billion, achieving more than two-thirds of its P20.4 billion income forecast for 2013. The bank is optimistic of hitting its year-end targets as BDO continues to expand its businesses.
Other units performed in the first semester year-on-year as follows:
• Mall development arm SM Prime Holdings Inc. grew its net profit by 15 percent to P5.6 billion on higher revenues from its mall network in the Philippines and China;
• Residential development arm SM Development Corp. booked a net profit of P2.8 billion, up 5.9 percent year-on-year. Revenues from real estate sales stood at at P11.9 billion while net margin improved to 25.8 percent from 23.8 percent during the same period last year.