SMIC ‘recovering well’ as profit surges to P20B

SM Investments Corp. (SMIC) on Wednesday said its first-half net income surged to P20.1 billion, nearly three times its P7.1-billion profit booked in the same period last year as revenues grew by four percent.

The company finished with a topline of P193.5 billion in the first six months from P185.5 billion year on year. It did not provide figures specific to the second quarter.

“Our businesses continued to perform resiliently, recovering well as conditions allowed,” SMIC President and Chief Executive Officer Frederic C. DyBuncio said in a statement.

“Our banking and residential businesses performed well as we also continued to invest in long term expansion with new stores, bank branches, residential project launches, and investments in malls,” he added.

SMIC’s banking arm made up 58% of its reported net earnings from core businesses. The company also added 22 bank branches to its network during the period.

BDO Unibank, Inc. booked profits of P21.4 billion in the first half. Its total deposits grew to P2.7 trillion on the back of a 13% growth in CASA (current account/savings account) deposits.

BDO also recorded P64.4 billion in net interest income, while its customer loans “remained flat” year on year, amounting to P2.3 trillion.

“Total provisions amounted to P6.8 billion as the bank continued to build up its buffer,” SMIC said. “This was lower than the pre-emptive provisions booked in the first half of 2020 against possible pandemic-induced delinquencies.”

China Banking Corp.’s net income for the first six months went up by 39% to P7.3 billion, while net revenues grew by 18% to P24.8 billion as net interest income and its fee-based income also improved. Its “pandemic-related credit buffers” also grew by 13% year on year to P5.4 billion.

Meanwhile, SMIC’s property segment accounted for 18% of its earnings from core businesses. SM Prime Holdings, Inc.’s consolidated net income for the January-to-June period grew by 12% to P11.6 billion, while consolidated revenues declined by six percent to P41.1 billion.

“The reported improvement is due to the continued positive performance of the group’s residential business in the first half of 2021 as well as the malls business in the second quarter of the year,” SMIC said.

SM Prime’s residential business, which accounted for 60% of consolidated revenues and is led by SM Development Corp. (SMDC), generated a three percent growth in revenues to P24.5 billion. SMDC launched two new residential projects in the first semester, bringing to the market 3,900 new units via Sands Residences in Manila and Cheerful 2 Residences in Pampanga.

Affected by quarantine restrictions, revenues for its Philippine malls business declined by nearly 26% to P10.7 billion. Other businesses including offices, hotels, and convention centers contributed P3.1 billion to consolidated revenues.

SMIC’s retail segment accounted for 14% of its net earnings from core businesses. Retail income grew by nearly six-fold to P3.6 billion from P522 million due to cost reductions.

The company said SM Retail and its affiliates added 159 stores in the first semester.

SM Retail’s revenues for the six-month period inched down to P138.2 billion from last year’s P139.2 billion. Without disclosing specific figures, the company said revenues for its non-food segment grew by 17.8% and its call to deliver segment accounted for 13.1% of total revenues.

SMIC acquired additional shares in 2GO Group, Inc., increasing its stake in the company to 52.89% by end-June.

“We are confident of 2GO capturing a leading share in high-value activities in the growing local logistics and distribution sector and are pleased to continue to support its growth,” Mr. DyBuncio said.

SMIC said in a separate disclosure on Wednesday that its board also approved to acquire majority or around 74% of the outstanding voting capital stock of Goldilocks Bakeshop, Inc., making it an SMIC subsidiary.

“We are hopeful that the recovery momentum continues as we see more Filipinos get vaccinated,” Mr. DyBuncio said.

The company ordered over half a million coronavirus disease 2019 (COVID-19) jabs for employees and for its donation to the government.

“SM provides comfortable, convenient, safe and accessible vaccination venues all over the country,” the company said, adding that almost two million COVID-19 jabs were administered in over 60 of its malls across the country.

SMIC shares at the stock market inched down by 0.05% or 50 centavos on Wednesday, closing at P964 apiece. — Keren Concepcion G. Valmonte

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