MANILA, Philippines–The Sy family-led conglomerate SM Investments Corp. (SMIC) saw a 2.1 percent year-on-year decline in its nine-month net profit to P18.2 billion due to slower contribution from the banking segment compared to that of 2013.
Taking out non-recurring items, the conglomerate said core net income in the first nine months grew by 13.7 percent year-on-year to P18.1 billion. The comparative net income in 2013 included exceptional items such as the surge in trading gains in the banking industry, including those of banking subsidiary Banco de Oro Unibank (BDO).
SMIC’s consolidated revenues grew by 7.7 percent to P193.2 billion in the period compared to the same nine-month period in 2013.
Banking accounted for 41.9 percent of consolidated net income in the first nine months and property accounted for 39.1 percent while retail contributed 19 percent.
“We were able to sustain solid revenue growth across our core businesses of retail, banking and property. We also saw more robust real estate sales in the quarter with the launch of new projects. Our underlying profitability was driven by strong delivery of BDO and steady property contribution,” SM president Harley Sy said in a press statement on Thursday.
“In retail, gross margins have stabilized despite the intensifying competition, and we remain committed to expanding to new formats to tap the unserved and underserved markets,” he said.
SM Retail, the only unlisted segment among SMIC’s core businesses, posted a 5 percent year-on-year growth in net income to P3.8 billion. Total sales rose by 9.2 percent year-on-year to P136.4 billion, maintaining its leading market position in the country.
“The food retail business in particular is on an aggressive expansion mode to penetrate the informal sector and both urban and rural communities,” the company said.
“In the department store business, the SM Store continues to introduce fresh concepts and its expansion is on track in line with the completion of new SM malls,” it said.
SM Retail opened 16 new stores in the first nine months, bringing the total to 255 stores, consisting of 49 SM Stores, 40 SM Supermarkets, 41 SM Hypermarkets, 102 Savemore stores and 23 WalterMart stores. This year, the SM Store opened in Cauayan, Isabela.
In terms of food retail stores, SM opened 15 new stores in various parts of Luzon, Visayas and Mindanao.
The group’s banking and property units performed in the first nine months versus the previous year as follows:
BDO net income attributable to equity holders of the parent slowed by 8.24 percent to P16.7 billion in the absence of large trading gains seen in 2013 cut excluding these, core income was up by 20 percent; and,
SM Prime Holdings Inc. grew its consolidated net income by 11.8 percent to P13.5 billion on higher rental revenue primarily due to the new and expanded malls in 2013 and 2014 such as SM Aura Premier in Taguig, SM City BF Parañaque, Mega Fashion Hall in SM Megamall in Mandaluyong and SM Cauayan in Cagayan Valley, which added 527,000 square meters to total portfolio.
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