SMIC income hits P18.4B in Q1, banking business dominates

SM Investments Corp. (SMIC) said it saw a 6% increase in its consolidated net income for the first quarter (Q1), reaching P18.4 billion from P17.3 billion last year, driven by higher revenues across its businesses.

Consolidated revenues climbed by 4% to P144 billion compared with P138.3 billion last year, SMIC said in a statement on Wednesday.

Banking accounted for 52% of reported net earnings from core businesses, followed by property at 29%, retail at 12%, and portfolio investments at 7%.

“We continue to benefit from the country’s underlying economic growth and we adapt to reflect consumers’ evolving spending habits and priorities,” said SMIC President and Chief Executive Officer Frederic C. DyBuncio.

“Looking ahead, our outlook remains cautiously optimistic and our expansion is on track,” he added.

SM Retail’s first-quarter net income dropped by 20.5% to P3.1 billion from P3.9 billion last year. Its revenues increased by 3% to P93.8 billion.

Food retail revenues improved by 6% to P57 billion.

In terms of nonfood retail, department store revenue fell by 4% to P22.4 billion, while specialty retail revenue went down by 1% to P20.4 billion due to weaker consumer spending.

The conglomerate’s banking unit, BDO Unibank, Inc., saw a 12% increase in its net income to P18.5 billion as net interest income grew by 13%, while deposits increased by 13%.

China Banking Corp. recorded an 18% climb in net income to P5.9 billion. Net interest income rose by 18% to P15 billion driven by higher asset yields and loan volume. Gross loans increased by 11% to P805 billion.

SMIC’s property unit, SM Prime Holdings, Inc., logged an 11% increase in its first-quarter consolidated net income to P10.5 billion as consolidated revenue rose by 7% to P30.7 billion.

Revenue of the mall business, which contributed 59% of consolidated revenues, increased by 7% to P18.2 billion. Mall rental income rose by 8% to P15.8 billion.

Other revenues including cinema and event ticket sales stood at P2.5 billion.

The primary residential business group, which accounted for 28% of consolidated revenues, rose by 10% to P8.5 billion revenues. Reservation sales reached P26.5 billion.

Revenues of other business segments, composed of offices, hotels, and convention centers, grew 9% to P3.4 billion.

SMIC said the net income of its portfolio investments was driven by Atlas Consolidated Mining and Development Corp. and the NEO Group.

“SM Investments expects the portfolio businesses to make a larger contribution to the group’s revenues and earnings over time,” it said.

The conglomerate’s total assets stood at P1.6 trillion while the gearing ratio remained conservative with 33% net debt to 67% equity.

SMIC and SM Prime have issued their maiden $3-billion multi-issuer euro medium-term note (EMTN) program. EMTNs are debt securities that are issued and traded overseas.

SMIC SG Holdings Pte. Ltd. and SMPHI SG Holdings Pte. Ltd. jointly established the EMTN program.

SMIC SG Holdings is a wholly owned subsidiary of SMIC, while SMPHI SG Holdings is a wholly owned unit of SM Prime.

“This EMTN program will allow SMIC and SM Prime to tap the offshore bond market to fund its continued growth and expansion,” the conglomerate said.

On Wednesday, SMIC shares retreated by 2.8% or P26.50 to P921 apiece. — Revin Mikhael D. Ochave