SMIC Q1 profit up 8%

The country’s largest conglomerate, SM Investments Corp., boosted its first quarter net profit by 8 percent year-on-year to P7.7 billion on higher earnings across its core retailing, banking and property businesses.

Consolidated revenue also rose by 8 percent to P84.5 billion in the first three months compared to the same period last year, SM disclosed to the Philippine Stock Exchange yesterday.
“SM is off to a strong start in the first quarter with good growth and steady profit margins across our core businesses. We are also pleased with recent acquisitions like our stake in 2GO Group, which will help us build our portfolio of investments to capture the high growth of the Philippine economy,” newly appointed SM president Frederic DyBuncio said in a statement.

Property accounted for 44 percent of SM’s consolidated net income in the first quarter, followed by banks, 35 percent, and retail, 21 percent.

Retail operations under SM Retail Inc.—the only core business that is not separately listed in the exchange—posted P2.3 billion in net profit for the quarter, up by 3 percent year-on-year. This was on the back of a 7-percent growth in total sales to P61.4 billion.

The retail business consists of both food (SM Markets) and non-food (The SM Store and specialty retail). As of the end of March, SM Retail had 2,194 stores composed of 57 The SM Stores, 1,584 specialty retail stores, 48 SM Supermarkets, 44 SM Hypermarkets, 165 Savemore, 39 WalterMart and 257 Alfamart stores.

SM Markets’ expansion in the first quarter was focused on Savemore, its neighborhood store format. Savemore opened 10 new stores in the quarter.

Revenues from SM Retail’s specialty retail stores grew by 7 percent to P14.2 billion. This segment includes Ace Hardware, SM Appliance Center, Homeworld, Our Home, Toy Kingdom, Watsons, Kultura, Baby Company and Sports Central.

On banking, it was earlier reported that BDO Unibank posted a profit of P5.8 billion, up 6 percent year-on-year as net interest earnings expanded by 19 percent.

China Banking Corp.’s net income also grew by 6 percent year-on-year to P1.5 billion in the first quarter due to strong growth in lending and core fee-based income. Net interest income rose by 14 percent to P4.5 billion.

Property arm SM Prime Holdings Inc. reported a year-on-year net income growth of 13 percent in the first quarter to P6.6 billion. Consolidated revenue rose by 12 percent to P20.5 billion on higher earnings across its shopping mall, residential development, office leasing and hotel/convention businesses.

SM’s equity investments include stakes in strong assets such as the City of Dreams Manila property, NET Buildings, CityMalls and others. It recently announced the acquisition of a 34.5-percent stake in the parent company of 2GO Group and 61.2 percent of dormitory developer MyTown.

The conglomerate said it was continuing to “look to invest in partners with leading positions, strong management and potential for high growth and attractive yields.”

As of March, total assets of SM grew by 16 percent to P895.5 billion.