Core businesses push SMIC income to hit P19.4B

The SY family-led conglomerate SM Investments Corporation (SMIC) grew its nine-month net profit by 7 percent year-on-year to P19.4 billion, driven by higher earnings across its retailing, banking and property businesses.

Excluding extraordinary items, SMIC’s recurring net income grew by 12 percent year-on-year to P206.2 billion for the nine-month period on the back of a 7-percent rise in consolidated revenues.

“Our strong results year-to-date reflect our ongoing focus on delivering footprint expansion across the country and on driving cost competitiveness in all our core businesses,” SMIC president Harley T. Sy said in a press statement on Wednesday.

SMIC’s earnings were driven by the 21-percent year-on-year growth in retail earnings, 15 percent growth in the property business, and 5 percent in the banking business.

For the first nine months, banks accounted for 40 percent of consolidated earnings, property accounted for 39 percent, while retail had a share of 21 percent.

Retail operations under SM Retail Inc.—the only core unit within the group not listed—saw a 6.5 percent growth in total sales to P145.3 billion in the nine-month period while net income rose by 21 percent year-on-year to P4.6 billion.

The group’s food retail group, SM Markets, expanded in both urban and rural communities in various parts of Luzon, Visayas and Mindanao.  This unit added 20 new stores, mostly standalone Savemore stores.

From initially operating anchor stores based in malls, SM Markets today follows a multi-format growth strategy to address the lack of organized retail in many parts of the country. It said this is to sustain growth and leading market share amid the entry of aggressive competitors in the low-margin, high-volume retailing business.

SM Markets also recently invested in the mini-mart business with Alfamart, a highly successful retailer in Indonesia. It also entered into partnerships with Waltermart and Citymalls to facilitate provincial growth.

Acquisition of existing chains of stores is likewise part of SM Markets’ growth strategy, the latest of which is the purchase of three Cherry Foodarama stores.

Meanwhile, the group said its department store unit, SM Store, would maintain its strategy of growing as an anchor store in SM Malls while also targeting expansion in the provincial areas. SM Store remains the country’s biggest department store operator.

SMIC’s other core business segment, Banco de Oro Unibank (BDO), had posted a 5-percent growth in its nine-month net income to P17.6 billion.

This factored in the acquisition of One Network Bank, the largest rural bank in Mindanao, which added over P20 billion to the total loan and deposit portfolio of BDO.

Consolidated net income of SM Prime Holdings Inc., meanwhile, increased by 70 percent year-on-year to P22.9 billion in the first nine months.

As of end-September, SMIC’s total assets grew by 7 percent year-on-year to P735.5 billion.