SMIC sees earnings improvement in 2014

MANILA, Philippines - SM Investments Corp. (SMIC), the investment holding firm of tycoon Henry Sy, expects full year 2014 earnings to improve from the previous year despite slower growth in the first nine months of the year as business picked up in the fourth quarter.

In an interview, SMIC investor relations head Cora Guidote told The STAR that profits last year “should be better” than 2013 due to strong fourth quarter results of its banking and retail operations.

“It seems that BDO’s numbers were strong. Usually, the banking business has been our major growth driver,” Guidote said.

“Our growth rate on the parent level is usually on the lower teens,” she added.

SMIC’s profits in 2013 climbed 11 percent year-on-year to P27.45 billion.

The mall and banking conglomerate’s nine month net income last year, however, dropped 2.4 percent to P18.2 billion from P18.6 billion during the same period the previous year on the back of lower banking profits.

In the nine-month period, BDO Unibank posted a lower net income of P16.7 billion compared with P18.2 billion a year ago.

Minus extraordinary trading gains from the banking business, SMIC’s consolidated net income in the first nine months of 2014, however, grew 13.7 percent to P18.1 billion from P15.9 billion.

SMIC chief finance officer Jose Sio earlier said the conglomerate expects slower profit growth for 2014 in the absence of extraordinary trading gains from BDO.

But with its retail and banking businesses picking up pace in the fourth quarter due to increased consumer spending during the holiday season, market observers said it is possible for SMIC to turn things around easily.

SMIC is one of the country’s largest conglomerates with interest in banking, shopping malls, real estate, tourism and retail sectors.