SM nets P11 B in 1st half of 2012

SM Investment Corp. website

MANILA, Philippines – SM Investments Corp. grew its first-half net profit by 13 percent year-on-year to P10.9 billion on the back of higher earnings from its banking, retailing, shopping mall and residential property businesses.

Total revenues went up by 14 percent year-on-year to P105.2 billion as all the core businesses delivered on their sales targets. Cash flow as measured by earnings before interest, taxes, depreciation and amortization (EBITDA) rose by 12 percent to P24.1 billion from the same period last year for an EBITDA margin of 22.8 percent. Return on equity was steady at 14 percent.

In light of the severe flooding that recently wreaked havoc on Metro Manila and some parts of Luzon, SMIC also announced that the group’s corporate social responsibility arm would double relief efforts this year compared to previous calamities.

On its first semester results, SMIC said banks (Banco de Oro Unibank and China Banking Corp.) continued to provide the largest contribution to consolidated net income with a 30.9 percent share, followed by retail operations with 28.2 percent. Malls came in third with a share of 24.2 percent followed by property development with 16.7 percent.

SM Retail reported a 7.8 percent growth in six-month net income to P2.7 billion, fueled by a sales growth of 8.3 percent to P73.8 billion versus their comparable levels last year. EBITDA was up 11 percent year-on-year to P4.9 billion for an EBITDA margin of 7 percent. Net margin was steady at 3.7 percent.

For the last 12 months, the number of stores operated by SM Retail increased by 35, of which two are department stores, two are SM Supermarkets, 28 are SaveMore stores and seven are SM Hypermarkets. As of end-June, SM Retail’s total number of stores reached 183, consisting of 43 department stores, 34 SM Supermarkets, 73 SaveMore stores and 33 SM Hypermarkets.

“The group continues to expand all of its store formats with particular focus on the growth of SaveMore stores which has gained very strong market acceptance. This stand-alone store format which is patterned after a typical neighborhood grocery store offers greater convenience in communities where organized retail is lacking. SaveMore provides fresh food concepts, clean and attractive store layouts, and a highly diverse yet reliable mix of products and services,” SM said in a disclosure.

The unlisted real estate arm SM Land grew its six-month net profit by 37 percent to P3.2 billion for a net margin of 23 percent. First semester revenues amounted to P13.9 billion, up by 59 percent year-on-year. Most of SM Land’s revenues and net income were derived from its residential arm SM Development Corp. (SMDC).

SMIC’s listed operating units performed in the first semester year-on-year as follows:

SM Prime Holdings grew its net profit by 15 percent to P4.9 billion on the back of a 15-percent expansion in revenues to P14.6 billion. The growth was attributed to the improved performance of the existing malls both in the Philippines and China with same store sales growing by 8 percent, boosted further by the opening of new malls in 2010 and 2011.

BDO Unibank Inc. reported a 15-percent increase in net income to P5.83 billion driven by an increase in net interest income (2 percent) and non-interest income (7 percent).

SMDC’s net income increased by 38 percent to P2.7 billion, boosted by a 31.8-percent growth in income from real estate (P2.51 billion). As an indicator for future growth, first-half home sales surged by 85 percent to P19.8 billion.

SMIC’s total assets expanded by 28 percent to P518.4 billion at end-June year-on-year driven by growth in equity and fresh funds through borrowing, primarily from a five-year $250 million convertible bond issued earlier this year, with a coupon rate of 1.625 percent and a yield to maturity of 2.875 percent per annum.

“SM Foundation, our corporate social responsibility arm, doubled its relief operations this year, compared with the efforts done in previous calamities as we saw the larger scope of damage done by the recent monsoon surge. We will continue to help and assist our countrymen through medical missions and giving relief goods to the many areas affected by severe flooding,” SM president Harley Sy said.

SM Prime president Hans Sy added: “When floodwaters rose in many parts of Luzon, we kept the malls open for flood victims to temporarily take refuge in SM malls. We opened our multi-level parking facilities to allow residents who live in low-lying areas to park their vehicles away from the flood. We are also now using our events hall at SM Megamall as a drop off point for those who wish to donate relief goods for the typhoon victims, which will be distributed accordingly by SM Foundation.”