SM group rebounds, posts P8B in Q3 profit

SM Investments Corp. (SMIC) returned to profitability in the third quarter as the economy gradually reopens following the lockdown protocols imposed by the government since mid-March to prevent the spread of the coronavirus pandemic.

SMIC posted P8.11 billion in net profit in the third quarter, down by 19 percent year-on-year. This, however, marked a turnaround from the net loss of P1.91 billion incurred in the second quarter.

This brought SMIC’s consolidated net income to P15.2 billion from January to September, down 54 percent year-on-year. Consolidated revenue for the nine-month period was 18 percent lower year-on-year at P286.7 billion.

However, SMIC’s revenue rose by 36 percent in the third quarter to P101.1 billion from P74.4 billion in the second quarter.

The P8.11-billion third quarter net profit exceeded the P7.09 billion bottom line for the whole of the first semester 2020.

“We are encouraged by marked improvements in our quarter-on-quarter results as we saw renewed consumer activity. We remain watchful of underlying demand as we continue to face headwinds in the economy in areas such as employment and remittances,” SMIC president Frederic DyBuncio said.

“In aid of reviving econo­mic activity, SM has undertaken many programs for micro, small and medium enterprises ­(MSMEs) across the group, such as through marketing campaign support and by waiving fees to help our MSMEs sustain their operations as well as credit support and improved cash access to our many banking clients across the country,” DyBuncio said.

Banking accounted for 50 percent of SMIC’s reported net earnings from core businesses, followed by property at 41 percent and retail at 9 percent.

SM Retail posted a net profit of P2.2 billion for the nine-month period, down by 73 percent from the same period last year. Nine-month revenue fell by 15 percent year-on-year to P216.3 billion.

Food retail revenue grew by 11 percent in the first nine months, with convenience store chain Alfamart posting an increase of 27 percent. Alfamart is slated to open its 1,000th store on Nov. 11. Despite the challenges brought about by the pande­mic, Alfamart is on track to open more than 250 stores in 2020.

Revenue of the department store segment under SM Store hit P10.5 billion in the third quarter, up by 109 percent from the second quarter, while specialty stores posted 93-percent quarter-on-quarter revenue growth to P14.2 billion.

During the lockdown, SMIC harnessed digital platforms to boost sales volume despite restricted mobility.

The January to September net profit of property arm SM Prime Holdings amounted to P14.4 billion, down by 48 percent year-on-year as mall rental revenue plunged due to rental waivers in the first semester.

BDO’s nine-month net profit declined by 48 percent year-on-year to P16.6 billion due to large loan loss provisions set aside in the second quarter in anticipation of a surge in bad loans. For the third quarter, net profit rose by 3 percent year-on-year to P12.3 billion.

China Banking Corp. posted P8.2 billion in nine-month net income, 23 percent up year-on-year.