SMIC bets big on renewable energy

MANILA, Philippines — SM Investments Corp., the conglomerate led by the Sy family, is exploring renewable energy as its next avenue for diversification.

Teresita Sy-Coson, vice-chairperson of SMIC, said that the SM Group, having expanded from a humble shoe store into various industries, is now targeting the renewable energy sector to further boost its profitability.

“(The growth) will be more in renewable because we have to source from renewables. We get 50 percent of our energies from renewables,” Sy-Coson said in an interview with Bloomberg’s Yvonne Man on the sidelines of the Bloomberg New Economy Forum on Bloomberg Markets: Asia.

SMIC’s property unit SM Prime Holdings is sourcing 50 percent of its energy requirement from renewable sources.

Furthermore, SM Prime aims to reach net zero greenhouse gas (GHG) emissions by 2040.

SMIC is likewise ramping up clean energy supply through its wholly owned Philippine Geothermal Production Company (PGPC).

The company is a leading provider of geothermal steam for sustainable energy, which has several greenfield concession areas for geothermal steam development.

PGPC targets to increase its steam production by another 300 megawatts of baseload renewable energy through new exploration projects. This will increase its geothermal capacity to an estimated total of 600 megawatts.

In the nine months to September, SMIC reported a consolidated net income of P55.9 billion, up by 30 percent from P42.9 billion a year.

The company raked in P440.4 billion in consolidated revenues, up by 15 percent.

Of the total net earnings, banking accounted for the largest share at 47 percent while property contributed 26 percent.

Retail accounted for 18 percent and portfolio investments pitched in nine percent.

These portfolio investments are through PGPC and office developer NEO.

SMIC is into retail, banking, and property. Its retail operations are the country’s largest and most diversified, consisting of grocery stores, department stores and specialty retail stores.

SM’s property arm, SM Prime Holdings Inc. includes malls, residences, offices, hotels, and convention centers as well as tourism-related property developments.

The banking businesses are through BDO Unibank Inc., the country’s largest bank, and China Banking Corp. the fourth largest private domestic bank.