SMIC net income jumps 27% to P23 B in H1
SM Investments Corp.(SMIC) hiked its net income by 27 percent in the first half of the year to P23 billion, driven by its property and banking units.
In a disclosure to the Philippine Stock Exchange, SMIC said its property and banking businesses accounted for 41 percent and 40 percent of net income, respectively, while retail contributed 19 percent.
“We delivered a strong first half, underpinned by remarkable bank earnings and robust residential take-up.Our retail business continues to do well and we are pleased with the rapid expansion of our minimart footprint through Alfamart,” SMIC president and chief executive officer Frederic DyBuncio said.
Consolidated revenues rose 14 percent to P233.7 billion in the first half from P204.3 billion in the same period last year.
SM Prime, the company’s property development arm, reported a net income of P19.3 billion in the first half, 16 percent higher than the previous year, while consolidated revenues increased by 15 percent to P57 billion from P49.8 billion in the same period last year.
This was driven by mall revenues which accounted for 55 percent of total revenues and rose eight percent to P31.1 billion in the first half.
In addition, rental revenues alone grew seven percent to P26.2 billion, driven by the seven percent same-mall sales growth and rising contribution from newly opened and expanded malls in 2018.
As of June, the group has a total of 72 malls in the Philippines and seven in China, with a gross floor plate of 9.7 million square meters.
Its residential arm also posted significant revenue growth of 26 percent to P21.4 billion. This accounts for 38 percent of total revenues.
Meanwhile, the Commercial Properties Group and Hotels and Convention Centers posted a 13 percent increase in revenues to P4.6 billion in the first half.
Its banking arm, BDO Unibank Inc., reported a net income of P20.2 billion in the first half of the year, driven by strong recurring earnings from its core businesses, solid growth in fee income and normalization of trading and forex gains.
Net interest income rose 24 percent to P56.9 billion, while customer loans grew seven percent to P2 trillion on sustained double-digit growth in the consumer and middle market segments.
Total deposits increased three percent to P2.4 trillion during the period due to customers’ shift to higheryielding fixed income investments, primarily bank-issued bonds.
Moreover,SM Retail, the group’s retail arm, reported a 13 percent jump in revenues to P169.8 billion while net income stood at P5.7 billion.
Excluding the adjustments due to the adoption of Philippine Financial Reporting Standards (PFRS) #16 (a new accounting standard for leases), retail’s net income grew 10 percent to P6.3 billion.
At end-June 2019, SM Retail had a total of 2,600 stores, comprising 63 The SM Stores, 1,548 specialty stores, 57 SM Supermarkets, 52 SM Hypermarkets, 197 Savemore stores, 55 WalterMart stores and 628 Alfamart stores.
The Food Retail Group continued its expansion in both urban and rural communities nationwide, adding four midsized format Savemore stores, one SM Supermarket and three WalterMart stores. Meanwhile, Alfamart increased its number of stores by 102 to 628 at the end of the first half.
As of the first half, total gross selling area of all department stores stood at 795,864 square meters.
Revenues from SM Retail’s specialty retail stores grew 15 percent to P42.6 billion, in part driven by expansion and strong same-store growth.
“Our performance reflects our commitment to sustainable operations and adherence to good corporate governance which has been affirmed by our recent inclusion in the FTSE4Good index,” DyBuncio said.
SMIC and SM Prime Holdings Inc. were recently confirmed as part of the FTSE4Good Index Series (FTSE4Good) for their strong environmental, social and governance (ESG) practices.
FTSE4Good is managed by FTSE Russell of the London Stock Exchange Group and is designed to identify companies that demonstrate strong ESG practices against globally recognized standards.