Eclipsing forecasts, SMIC hit P 38.5-B profit in 2021

The country’s largest conglomerate, SM Investments Corp. (SMIC), grew its 2021 net profit by 65 percent to P38.5 billion, beating market forecasts as its banking businesses delivered robust earnings.

Last year’s profit was 12.5-percent higher than Bloomberg’s market consensus forecast of P34.21 billion and accounted for 86.4 percent of the Sy family-led holding firm’s prepandemic bottom line.

For the fourth quarter alone, SMIC’s net profit came in at P11.26 billion, 38-percent up year-on-year. Sequentially, it was also higher than the P7.15-billion net profit in the third quarter.

Consolidated revenues for the full year grew by 9 percent to P428.1 billion compared with P394.2 billion in 2020.

“We saw a rebound in consumer spending in the run up to Christmas as restrictions across the country eased. This led to improved performance in our retail and mall units as our banks continued to deliver solid results,” SMIC president and CEO Frederic C. DyBuncio said in a disclosure to the Philippine Stock Exchange on Monday.

The consolidated food and nonfood retail businesses under SM Retail Inc. delivered P9.6 billion in net profit last year, 133-percent better than the level seen in 2020 when pandemic lockdowns were at their tightest. Revenues from this low-margin but high-volume business increased by 2 percent to P303.9 billion.

This year, Bloomberg market consensus expects SMIC’s net profit to reach P46.1 billion, exceeding the P44.6-billion bottom line posted in 2019 or the last full year before the pandemic wreaked havoc on the global economy.

“It is our hope that the further easing of restrictions after the latest surge in COVID cases will lead to sustained recovery of the economy and our businesses as the country adjusts to living with the virus. We are committed to continue our expansion plans,” DyBuncio added.

In 2021, banking contributed 51 percent of SMIC’s net income, while property accounted for 25 percent. The retail business contributed 17 percent and portfolio investments accounted for the remaining 7 percent.

“We believe our portfolio investments have strong assets, synergies with our core businesses and enormous long-term growth potential,” DyBuncio said.

Among its portfolio investments, SMIC increased its ownership in food retailer Goldilocks Bakeshop Inc. to 74 percent and 2GO Group Inc. to 53 percent in 2021. INQ