SMIC net income up 8% to P23.8 billion

THE EXPANSION of country’s richest man Henry Sy, Sr.’s shopping mall empire alongside strong sales of residential properties drove SM Investments Corp. (SMIC)’s consolidated profit 8% higher in the first nine months of 2017.

SMIC reported on Wednesday a consolidated net income of P23.8 billion in the January to September period, getting a boost from an 8% increase in consolidated revenues to P272.2 billion. Excluding one-time gains, recurring net income jumped 13% for the period.

“Our solid third quarter results benefited from vibrant growth in our property and retail businesses. Property earnings were driven by nationwide mall expansion and the strong performance of residential developments. Retail also gained from footprint expansion and robust consumer sentiment, particularly in specialty retailing,” SMIC President Frederic C. DyBuncio said in a statement.

SMIC has core investments in property, banking, and retail, which accounted for 40%, 38%, and 22%, of its consolidated profit, respectively.

For the property segment, SM Prime Holdings, Inc. grew its attributable profit by 15% to P20.05 billion in the nine-month period. This was driven by a 12% increase in consolidated revenues to P64.7 billion coming from its mall expansion program.

SM Prime ended September with a total of 65 malls, allowing it to post a 10% increase in mall revenues to P38.6 billion. Mall rentals on the other hand picked up 10% to P32.8 billion.

The residential business through SM Development Corp. meanwhile jumped its consolidated revenues to P20.5 billion, as it saw an increase in sales of ready-for-occupancy units. The company further recorded P42.1 billion in reservation sales, an 18% increase year on year.

SM Prime’s other businesses, comprised of office, hotels, and convention centers, meanwhile, boosted revenues by 39% to P5.8 billion.

Higher income from core and fee-base businesses drove BDO Unibank, Inc.’s earnings 5% higher in the nine months ending September to P20.4 billion, against the P19.3 billion recorded in the same period in 2016.

BDO’s customer loan portfolio grew by 18% for the period to P1.7 trillion, pushing net interest income 23% higher to P59.8 billion.

For the retail business, SM Retail, Inc. delivered a 10% jump in earnings to P7.7 billion, with total sales growing 6% during the period to P197.9 billion.

SM Retail ended the period with more than 750,000 square meters of gross selling areas across 59 department stores, while The SM Store opened two new stores inside the recently opened SM malls in Cagayan de Oro and Puerto Princesa.

The company also continued to expand its footprint in the food retail segment with the addition of 21 mid-sized format Savemore stores, three SM Supermarkets, and two Waltermart stores. This allowed SM Retail to end the period with 26 new stores, most of which are located in communities outside Metro Manila.

SM Retail’s convenience store brand Alfamart, meanwhile, expanded to 320 stores at the end of the nine- month period, against the 210 at the beginning of 2017. Specialty retail stores, which include Ace Hardware, Toy Kingdom, and Watsons, managed to add 68 new stores.

Shares in SMIC lost P2.50 or 0.26% to P972.50 each at the Philippine Stock Exchange on Wednesday. —