SMIC kicks off mammoth P60-B stock buyback program

Frederic DyBuncio—CONTRIBUTED PHOTO

MANILA, Philippines – SM Investments Corp. (SMIC), the country’s largest company in terms of market capitalization, kicked off its mammoth P60-billion share buyback program on Friday, signaling its confidence in its future growth.

In a stock exchange filing on Friday, the Sy family-led conglomerate said it had bought back P48.6 million worth of its shares from the market.

The transaction involved 60,000 shares worth an average of P810 each.

READ: SMIC launches P60-B share buyback program

This comes under a month after SMIC announced its first share buyback program in its 60-year history, saying that there was a “significant undervaluation” of its share price.

SMIC president and CEO Frederic DyBuncio said they were trading “well below” the company’s historical valuation and that its current price “[does] not reflect the performance and future growth potential of the group.”

“We always aim to create and return value to our shareholders,” DyBuncio said in an earlier statement. “This program intends to do so by authorizing the buyback of up to approximately 6 percent of our shares outstanding.”

Investor confidence

SMIC closed lower by 1.23 percent on Friday to P800. So far, the company’s share price has gone down by 9.3 percent since the beginning of the year.

Companies typically buy back shares from the public to raise their share price, helping boost investor confidence.

Analysts earlier said that SMIC’s buyback program likewise signaled its optimism in the Philippines’ economic prospects, especially since the group was present in several industries.

Record income

Last year, SMIC booked the highest net income in Philippine corporate history at P82.6 billion, up by 7 percent, on the strong performance of its core businesses despite inflationary headwinds.

Revenues likewise rose by 6 percent to P654.8 billion.

Banking under BDO Unibank Inc. and China Banking Corp. accounted for 49 percent of the group’s total net income, followed by property (SM Prime Holdings Inc.) at 26 percent, SM Retail at 18 percent and portfolio investments (Philippine Geothermal Production Co., NEO and Belle Corp.) at 7 percent.