SMIC beats forecast, posts record profit

MANILA, Philippines - SM Investments Corp. (SMIC), the holding firm for the various businesses of tycoon Henry Sy Sr., sustained its strong double-digit profit growth last year amid a robust economy.

In a statement, SMIC said its earnings jumped 16.5 percent to a record P24.7 billion last year, slightly beating the forecast growth of 16.3 percent, from P21.2 billion a year earlier.

Revenues climbed 12 percent to P223.9 billion from P199.9 billion in the previous year.

“The growth in earnings was broad-based, with SM’s mall, property, retail and banking businesses delivering strong results,” SMIC said.

“SM’s strong full-year results were anchored not only on very favorable economic conditions, but also on the ability of our businesses to efficiently and effectively address the needs of our customers,” said SMIC president Harley Sy.

He said the company will sustain its expansion and growth trend this year amid a positive economic outlook.

In its 2013-2015 plan, SMIC is aiming to grow by another 12 to 15 percent annually that will be supported by the company’s continuous expansion.

SMIC derived 34.4 percent of its income from banking (BDO Unibank Inc. and China Banking Corp.), 28.1 percent from retail operations (SM Retail Inc.), 22.9 percent from malls (SM Prime Holdings Inc.) and 14.6 percent from property development (SM Development Corp. and SM Land).

Main banking and BDO Unibank recorded P14.3 billion in earnings, beating the P12.5-billion profit guidance, from P10.5 billion in 2011.

“With the Philippine economy expected to sustain its growth momentum, BDO looks forward to tapping the promising growth opportunities in its customer segments, capitalizing on its established business franchise and wide distribution network,” SMIC said.

SM Retail, for its part, grew its income 12.5 percent to P6.6 billion.

Last year, SM Retail added 34 new stores — five SM department stores, four SM Supermarkets, seven SM Hypermarkets and 18 SaveMore stores. To date, the group now has a total of 202 stores.

“In view of the positive outlook for the economy in 2013, SM Retail will continue to expand its various store formats, especially its highly-successful stand-alone SaveMore stores, which are typically located in areas underserved by organized retail,” SMIC said.

Net income of mall developer and operator SM Prime rose double digits to P10.5 billion from P9.1 billion in 2011 largely due to rentals from the new mall space and its healthy same-store rental growth rate.

SM Prime opened six new malls last year: five in the Philippines and one in China. Property arm SM Development recorded a 17.5-percent growth in consolidated net income to P4.9 billion as revenues from real estate sales jumped 33.3 percent to P21.6 billion.

 SMIC allotted a record P65 billion for its capital expenditures this year, up from P56 billion in 2012.