SMIC income down

SM Investments Corp. (SMIC), the country’s largest conglomerate, posted a 3.1-percent decline in six-month net profit to P12.3 billion in the absence of extraordinary trading gains that jacked up the earnings of its banking business in the same period last year.

Taking out non-recurring items, however, SMIC’s net income went up by 11.8 percent year-on-year in the first semester to P12 billion, the SM family-led conglomerate reported to the Philippine Stock Exchange on Thursday.

“SM sustained its solid performance in the first half with strong underlying revenue and income growth across our core businesses. The banks continued to drive profitability while the property group delivered steady growth on both top and bottom lines. And even as competition continues to intensify, the retail business has been resilient and posting positive same store sales and gross margins are stabilizing. Overall, we are optimistic that we are on track for 2014,” SM president Harley Sy said in a statement.

A double-digit rise in earnings from the property business tempered the overall impact of the decline in earnings from the banking and retailing businesses.

Property (through SM Prime Holdings) now accounted for 40.5 percent of SMIC’s consolidated net income. The banks (Banco de Oro Unibank and China Banking Corp.) accounted for 39.8 percent while the retail business contributed about 19.7 percent.

SM Retail, the only unlisted business segment, posted a net income of P2.8 billion in the first semester, 3.4 percent lower year-on-year.

The decline was largely a “carryover” from the first quarter but the unit saw gross margins stabilize in the second quarter.