SMIC income rises to P77B on consumer spending

SM INVESTMENTS CORP. (SMIC) announced on Wednesday a 25% increase in its net income for 2023, reaching P77 billion from P61.7 billion in 2022.

The growth was primarily driven by increased consumer spending, the Sy-led conglomerate said in a statement on Wednesday.

The company’s consolidated revenues climbed by 11% to P616.3 billion versus P553 billion in 2022.

Among its business segments, banking had the largest contribution at 47%, followed by property at 25%, retail at 19%, and portfolio investments at 9%.

“A key success driver was the healthy spending patterns of Filipino consumers in both essential and discretionary purchases, particularly in fashion, dining and entertainment,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said.

“SMIC’s performance as a group last year reflected our ability to stay close to our customers and address their needs regardless of uncertain economic conditions,” he added.

On SMIC’s banking business, BDO Unibank, Inc. recorded a 29% jump in its 2023 income to P73.4 billion from P57.1 billion.

BDO’s net interest income climbed to P186.4 billion due to higher gross customer loans while total deposits increased by 11% to P3.57 trillion.

China Banking Corp. logged a 15% increase in net income to P22 billion due to higher core revenue. Net interest income grew by 17% to P53.5 billion, gross loans rose by 10% to P791 billion, while total deposits climbed by 11% to P1.2 trillion.

On the conglomerate’s property business, SM Prime Holdings posted a 33% increase in net income to P30.1 billion. Consolidated revenues improved by 21% to P128.1 billion.

Revenue of the mall business rose by 30% to P71.9 billion while mall rental income increased by 24% to P61.3 billion.

SMIC’s residential business, led by SM Development Corp., logged an 8% increase in revenue to P43.1 billion.

Other key businesses consisting of offices, hotels, and convention centers, reported an increase of 26% in revenues to P13.1 billion.

On the conglomerate’s retail business, SM Retail, Inc., which consists of grocery, department store, and specialty retail, posted an 11% increase in net income to P19.9 billion while revenue improved by 10% to P415 billion.

Revenues from SM’s Food Group consisting of SM Markets, WalterMart, and Alfamart, which took up almost half of total retail revenue growth, grew by 7%. Net income for the food segment increased 21%.

SM Store’s revenue rose by 16% while specialty retail revenue climbed by 11% led by spending on fashion, health and beauty, pets, toys, and other discretionary items.

The conglomerate has 3,853 retail outlets as of end of 2023. Out of the total 419 new stores opened during the year, 89% were located in provincial areas.

“This sustained growth is reflective of the spending power of Filipinos. Through our diverse range of brands, we cater to the many needs and wants of our consuming public,” Mr. DyBuncio said.

Meanwhile, the net earnings share of SMIC’s portfolio investment companies improved by 6% led by “buoyant passenger volumes in 2GO’s shipping business, the leisure and entertainment business of Belle Corp., and growth in Goldilocks Bakeshop.”

“Our portfolio companies continue to present solid potential as we invest in emerging sectors that positively impact the economy,” Mr. DyBuncio said.

SMIC’s other portfolio investments are in copper mining through Atlas Consolidated Mining & Development Corp., in community mall chain CityMall, office towers under the NEO Subsidiaries and NEO Associates, in bakeshop Goldilocks, in co-living provider Philippines Urban Living Solutions, Inc., and in electronic wallet provider GrabPay.

On Wednesday, SMIC shares fell by 0.87% or P8 to P913 apiece. —