SMIC profit up 14% to P16 billion in 2009 on strong retail sales

MANILA, Philippines - SM Investments Corp. (SMIC), the holding firm for the various business interests of the family of retail tycoon Henry Sy, reported a 14-percent rise in net earnings last year to P16 billion in spite of a tough financial landscape.

In a financial report submitted to securities regulators, SMIC said consolidated revenues rose nine percent to P160.1 billion on the back of higher retail sales. A large chunk or around 35.3 percent of total revenues came from the retail business, followed by banking, shopping malls and property (27.6 percent, 26.1 percent, and 11 percent, respectively).

“We are pleased to report that SM achieved its goals in 2009, in spite of the formidable challenges brought about by the spate of natural calamities in the country and the continued weakness in the global economy. We continue to learn from every crisis situation that it pays to stay very focused on our strengths and on our long-term plans for further expansion, keeping in mind the synergies we can tap among our different businesses to achieve greater financial and operational efficiency,” SM president Harley T. Sy said.

The retail division contributed P4.4 billion in net income, 27.9 percent higher than the year-ago figure, translating to an average net margin of 3.6 percent. Total sales amounted to P123.9 billion, up 7.9 percent.

The non-food retail group, composed of SM Department Stores, accounted for 42.8 percent while the food group, comprising of SM Supermarkets, SM SaveMore stores, SM Hypermarkets and Makro outlets, contributed 57.2 percent. In terms of net income, the non-food group contributed 30.1 percent of total, while the food group brought in 69.9 percent.

Overall, the retail group opened 24 stores, ending 2009 with a total of 119 stores (36 department stores, 26 supermarkets, 26 SaveMore, 19 hypermarkets and 12 Makro).

For this year, the retail group has budgeted P6 billion to put up 15 to 18 new stores across the country.

SM Prime Holdings Inc., the group’s corporate vehicle for its shopping mall operations, reported a 10 percent growth in consolidated net income last year to P7 billion on the back of a 15 percent jump in revenues.

In 2009, SM Prime opened SM City Naga in Camarines Sur, SM Center Las Piñas in Metro Manila and SM City Rosario in Cavite, adding 226,000 square meters to the company’s total gross floor area, inclusive of the expansion of SM City Rosales in Pangasinan, SM City Fairview and SM North EDSA.

For this year, SM Prime targets a total mall network of 41 nationwide with an estimated combined GFA of 4.8 million square meters by end-December 2010.

Main banking unit Banco De Oro, on the other hand, posted an audited net income of P6.1 billion last year, almost three times more than the P2.2 billion recorded in 2008, on strong growth in operating income and a slower increase in operating costs. China Bank, on the other hand, chalked in a net income of P4 billion, up 42.5 percent from P2.8 billion.

SMIC’s residential construction subsidiary SM Development Corp. (SMDC) posted a net income of P1.8 billion, or more than 31 times the P56.8 million recorded in 2008. Consolidated revenues surged 73 percent to P5.3 billion.